Correlation Between Armada Hflr and Global Warming

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

Diversification Opportunities for Armada Hflr and Global Warming

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between Armada and Global is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Global Warming Solut in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Warming Solut 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 Global Warming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Warming Solut has no effect on the direction of Armada Hflr i.e., Armada Hflr and Global Warming go up and down completely randomly.

Pair Corralation between Armada Hflr and Global Warming

Considering the 90-day investment horizon Armada Hflr Pr is expected to generate 0.06 times more return on investment than Global Warming. However, Armada Hflr Pr is 16.57 times less risky than Global Warming. It trades about -0.05 of its potential returns per unit of risk. Global Warming Solut is currently generating about -0.01 per unit of risk. If you would invest  1,107  in Armada Hflr Pr on September 18, 2024 and sell it today you would lose (8.00) from holding Armada Hflr Pr or give up 0.72% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Armada Hflr Pr  vs.  Global Warming Solut

 Performance 
       Timeline  
Armada Hflr Pr 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.
Global Warming Solut 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Global Warming Solut are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Global Warming displayed solid returns over the last few months and may actually be approaching a breakup point.

Armada Hflr and Global Warming Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Armada Hflr and Global Warming

The main advantage of trading using opposite Armada Hflr and Global Warming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Global Warming 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 Global Warming will offset losses from the drop in Global Warming's long position.
The idea behind Armada Hflr Pr and Global Warming Solut 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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