Correlation Between Armada Hflr and Columbia Thermostat

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Columbia Thermostat 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 Columbia Thermostat 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 Columbia Thermostat Fund, you can compare the effects of market volatilities on Armada Hflr and Columbia Thermostat 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 Columbia Thermostat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Columbia Thermostat.

Diversification Opportunities for Armada Hflr and Columbia Thermostat

-0.3

Correlation Coefficient

Armada Hflr  Columbia Thermostat

Very good diversification

The 3 months correlation between Armada and Columbia is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Columbia Thermostat Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Thermostat 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 Columbia Thermostat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Thermostat has no effect on the direction of Armada Hflr i.e., Armada Hflr and Columbia Thermostat go up and down completely randomly.

Pair Corralation between Armada Hflr and Columbia Thermostat

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Columbia Thermostat. In addition to that, Armada Hflr is 5.06 times more volatile than Columbia Thermostat Fund. It trades about -0.08 of its total potential returns per unit of risk. Columbia Thermostat Fund is currently generating about -0.01 per unit of volatility. If you would invest  1,673  in Columbia Thermostat Fund on September 14, 2024 and sell it today you would lose (4.00) from holding Columbia Thermostat Fund or give up 0.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	81.25%
Values	Daily Returns

Armada Hflr Pr  vs.  Columbia Thermostat Fund

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.

Columbia Thermostat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia Thermostat Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Columbia Thermostat is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and Columbia Thermostat

The main advantage of trading using opposite Armada Hflr and Columbia Thermostat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Columbia Thermostat 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 Columbia Thermostat will offset losses from the drop in Columbia Thermostat's long position.

The idea behind Armada Hflr Pr and Columbia Thermostat Fund 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.