Correlation Between Armada Hflr and DBS Group

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

Diversification Opportunities for Armada Hflr and DBS Group

-0.27

Correlation Coefficient

Armada Hflr  DBS Group

Very good diversification

The 3 months correlation between Armada and DBS is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and DBS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS Group Holdings 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 DBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS Group Holdings has no effect on the direction of Armada Hflr i.e., Armada Hflr and DBS Group go up and down completely randomly.

Pair Corralation between Armada Hflr and DBS Group

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the DBS Group. In addition to that, Armada Hflr is 1.12 times more volatile than DBS Group Holdings. It trades about -0.27 of its total potential returns per unit of risk. DBS Group Holdings is currently generating about 0.06 per unit of volatility. If you would invest  2,992  in DBS Group Holdings on September 24, 2024 and sell it today you would earn a total of  38.00  from holding DBS Group Holdings or generate 1.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Armada Hflr Pr  vs.  DBS Group Holdings

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 weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

DBS Group Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DBS Group Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DBS Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Armada Hflr and DBS Group

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

The idea behind Armada Hflr Pr and DBS Group Holdings 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.