Correlation Between Armada Hflr and GT Capital

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

Diversification Opportunities for Armada Hflr and GT Capital

-0.44

Correlation Coefficient

Armada Hflr  GT Capital

Very good diversification

The 3 months correlation between Armada and GTPPB is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and GT Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GT Capital 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 GT Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GT Capital Holdings has no effect on the direction of Armada Hflr i.e., Armada Hflr and GT Capital go up and down completely randomly.

Pair Corralation between Armada Hflr and GT Capital

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the GT Capital. In addition to that, Armada Hflr is 1.46 times more volatile than GT Capital Holdings. It trades about -0.21 of its total potential returns per unit of risk. GT Capital Holdings is currently generating about 0.01 per unit of volatility. If you would invest  97,726  in GT Capital Holdings on December 28, 2024 and sell it today you would lose (26.00) from holding GT Capital Holdings or give up 0.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	57.38%
Values	Daily Returns

Armada Hflr Pr  vs.  GT Capital Holdings

Armada Hflr Pr

Risk-Adjusted Performance

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 April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

GT Capital Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days GT Capital Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, GT Capital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Armada Hflr and GT Capital

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

The idea behind Armada Hflr Pr and GT Capital 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.