Correlation Between Armada Hflr and FlexShares STOXX
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and FlexShares STOXX 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 FlexShares STOXX 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 FlexShares STOXX Global, you can compare the effects of market volatilities on Armada Hflr and FlexShares STOXX 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 FlexShares STOXX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and FlexShares STOXX.
Diversification Opportunities for Armada Hflr and FlexShares STOXX
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Armada and FlexShares is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and FlexShares STOXX Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares STOXX Global 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 FlexShares STOXX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares STOXX Global has no effect on the direction of Armada Hflr i.e., Armada Hflr and FlexShares STOXX go up and down completely randomly.
Pair Corralation between Armada Hflr and FlexShares STOXX
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the FlexShares STOXX. In addition to that, Armada Hflr is 1.46 times more volatile than FlexShares STOXX Global. It trades about -0.37 of its total potential returns per unit of risk. FlexShares STOXX Global is currently generating about 0.04 per unit of volatility. If you would invest 17,497 in FlexShares STOXX Global on December 5, 2024 and sell it today you would earn a total of 91.00 from holding FlexShares STOXX Global or generate 0.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Armada Hflr Pr vs. FlexShares STOXX Global
Performance |
Timeline |
Armada Hflr Pr |
FlexShares STOXX Global |
Armada Hflr and FlexShares STOXX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Armada Hflr and FlexShares STOXX
The main advantage of trading using opposite Armada Hflr and FlexShares STOXX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, FlexShares STOXX 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 FlexShares STOXX will offset losses from the drop in FlexShares STOXX's long position.Armada Hflr vs. Modiv Inc | Armada Hflr vs. Precinct Properties New | Armada Hflr vs. Global Net Lease | Armada Hflr vs. NexPoint Diversified Real |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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