Correlation Between Armada Hflr and HALSTEAD JAMES

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and HALSTEAD JAMES 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 HALSTEAD JAMES 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 HALSTEAD JAMES LS 05, you can compare the effects of market volatilities on Armada Hflr and HALSTEAD JAMES 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 HALSTEAD JAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and HALSTEAD JAMES.

Diversification Opportunities for Armada Hflr and HALSTEAD JAMES

0.91

Correlation Coefficient

Armada Hflr  HALSTEAD JAMES

Almost no diversification

The 3 months correlation between Armada and HALSTEAD is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and HALSTEAD JAMES LS 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HALSTEAD JAMES LS 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 HALSTEAD JAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HALSTEAD JAMES LS has no effect on the direction of Armada Hflr i.e., Armada Hflr and HALSTEAD JAMES go up and down completely randomly.

Pair Corralation between Armada Hflr and HALSTEAD JAMES

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the HALSTEAD JAMES. In addition to that, Armada Hflr is 1.12 times more volatile than HALSTEAD JAMES LS 05. It trades about -0.21 of its total potential returns per unit of risk. HALSTEAD JAMES LS 05 is currently generating about -0.12 per unit of volatility. If you would invest  202.00  in HALSTEAD JAMES LS 05 on December 28, 2024 and sell it today you would lose (29.00) from holding HALSTEAD JAMES LS 05 or give up 14.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	96.83%
Values	Daily Returns

Armada Hflr Pr  vs.  HALSTEAD JAMES LS 05

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.

HALSTEAD JAMES LS

Risk-Adjusted Performance

Very Weak

Over the last 90 days HALSTEAD JAMES LS 05 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward-looking indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Armada Hflr and HALSTEAD JAMES

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

The idea behind Armada Hflr Pr and HALSTEAD JAMES LS 05 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.