Correlation Between Armada Hflr and HSBC SP
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and HSBC SP 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 HSBC SP 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 HSBC SP 500, you can compare the effects of market volatilities on Armada Hflr and HSBC SP 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 HSBC SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and HSBC SP.
Diversification Opportunities for Armada Hflr and HSBC SP
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Armada and HSBC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and HSBC SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC SP 500 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 HSBC SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC SP 500 has no effect on the direction of Armada Hflr i.e., Armada Hflr and HSBC SP go up and down completely randomly.
Pair Corralation between Armada Hflr and HSBC SP
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the HSBC SP. In addition to that, Armada Hflr is 2.05 times more volatile than HSBC SP 500. It trades about -0.21 of its total potential returns per unit of risk. HSBC SP 500 is currently generating about 0.16 per unit of volatility. If you would invest 5,710 in HSBC SP 500 on September 22, 2024 and sell it today you would earn a total of 135.00 from holding HSBC SP 500 or generate 2.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 91.3% |
Values | Daily Returns |
Armada Hflr Pr vs. HSBC SP 500
Performance |
Timeline |
Armada Hflr Pr |
HSBC SP 500 |
Armada Hflr and HSBC SP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Armada Hflr and HSBC SP
The main advantage of trading using opposite Armada Hflr and HSBC SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, HSBC SP 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 HSBC SP will offset losses from the drop in HSBC SP'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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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