Correlation Between Armada Hflr and Dreyfus Opportunistic

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

Diversification Opportunities for Armada Hflr and Dreyfus Opportunistic

0.3

Correlation Coefficient

Armada Hflr  Dreyfus Opportunistic

Weak diversification

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

Pair Corralation between Armada Hflr and Dreyfus Opportunistic

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Dreyfus Opportunistic. In addition to that, Armada Hflr is 1.25 times more volatile than Dreyfus Opportunistic Small. It trades about -0.15 of its total potential returns per unit of risk. Dreyfus Opportunistic Small is currently generating about -0.04 per unit of volatility. If you would invest  3,246  in Dreyfus Opportunistic Small on September 24, 2024 and sell it today you would lose (115.00) from holding Dreyfus Opportunistic Small or give up 3.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Armada Hflr Pr  vs.  Dreyfus Opportunistic Small

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.

Dreyfus Opportunistic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dreyfus Opportunistic Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dreyfus Opportunistic 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 Dreyfus Opportunistic

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

The idea behind Armada Hflr Pr and Dreyfus Opportunistic Small 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.