Correlation Between Armada Hflr and Calvert Large

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Calvert Large at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Armada Hflr and Calvert Large into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Armada Hflr Pr and Calvert Large Cap, you can compare the effects of market volatilities on Armada Hflr and Calvert Large and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Armada Hflr with a short position of Calvert Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Calvert Large.

Diversification Opportunities for Armada Hflr and Calvert Large

-0.42

Correlation Coefficient

Armada Hflr  Calvert Large

Very good diversification

The 3 months correlation between Armada and Calvert is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Calvert Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Large Cap and Armada Hflr is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Armada Hflr Pr are associated (or correlated) with Calvert Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Large Cap has no effect on the direction of Armada Hflr i.e., Armada Hflr and Calvert Large go up and down completely randomly.

Pair Corralation between Armada Hflr and Calvert Large

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Calvert Large. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.09 times less risky than Calvert Large. The stock trades about -0.04 of its potential returns per unit of risk. The Calvert Large Cap is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  6,729  in Calvert Large Cap on September 19, 2024 and sell it today you would earn a total of  216.00  from holding Calvert Large Cap or generate 3.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Armada Hflr Pr  vs.  Calvert Large Cap

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Calvert Large Cap

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Large Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Calvert Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Armada Hflr and Calvert Large

The main advantage of trading using opposite Armada Hflr and Calvert Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Calvert Large can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Calvert Large will offset losses from the drop in Calvert Large's long position.

The idea behind Armada Hflr Pr and Calvert Large Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.