Correlation Between Armada Hflr and Habco Trans

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

Diversification Opportunities for Armada Hflr and Habco Trans

0.67

Correlation Coefficient

Armada Hflr  Habco Trans

Poor diversification

The 3 months correlation between Armada and Habco is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Habco Trans Maritima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Habco Trans Maritima 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 Habco Trans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Habco Trans Maritima has no effect on the direction of Armada Hflr i.e., Armada Hflr and Habco Trans go up and down completely randomly.

Pair Corralation between Armada Hflr and Habco Trans

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Habco Trans. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 3.12 times less risky than Habco Trans. The stock trades about -0.37 of its potential returns per unit of risk. The Habco Trans Maritima is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  26,400  in Habco Trans Maritima on December 4, 2024 and sell it today you would lose (600.00) from holding Habco Trans Maritima or give up 2.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Armada Hflr Pr  vs.  Habco Trans Maritima

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.

Habco Trans Maritima

Risk-Adjusted Performance

Very Weak

Over the last 90 days Habco Trans Maritima has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Armada Hflr and Habco Trans

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

The idea behind Armada Hflr Pr and Habco Trans Maritima 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.