Correlation Between Armada Hflr and Financial Strategies

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

Diversification Opportunities for Armada Hflr and Financial Strategies

-0.5

Correlation Coefficient

Armada Hflr  Financial Strategies

Very good diversification

The 3 months correlation between Armada and Financial is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Financial Strategies Acquisiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Strategies 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 Financial Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Strategies has no effect on the direction of Armada Hflr i.e., Armada Hflr and Financial Strategies go up and down completely randomly.

Pair Corralation between Armada Hflr and Financial Strategies

Considering the 90-day investment horizon Armada Hflr is expected to generate 9.88 times less return on investment than Financial Strategies. In addition to that, Armada Hflr is 9.5 times more volatile than Financial Strategies Acquisition. It trades about 0.0 of its total potential returns per unit of risk. Financial Strategies Acquisition is currently generating about 0.2 per unit of volatility. If you would invest  1,045  in Financial Strategies Acquisition on October 7, 2024 and sell it today you would earn a total of  45.00  from holding Financial Strategies Acquisition or generate 4.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	26.21%
Values	Daily Returns

Armada Hflr Pr  vs.  Financial Strategies Acquisiti

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 fairly strong technical indicators, Armada Hflr is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Financial Strategies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Financial Strategies Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Financial Strategies is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and Financial Strategies

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

The idea behind Armada Hflr Pr and Financial Strategies Acquisition 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 Commodity Directory module to find actively traded commodities issued by global exchanges.