Correlation Between Armada Hflr and Melar Acquisition

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

Diversification Opportunities for Armada Hflr and Melar Acquisition

-0.38

Correlation Coefficient

Armada Hflr  Melar Acquisition

Very good diversification

The 3 months correlation between Armada and Melar is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Melar Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melar Acquisition Corp 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 Melar Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melar Acquisition Corp has no effect on the direction of Armada Hflr i.e., Armada Hflr and Melar Acquisition go up and down completely randomly.

Pair Corralation between Armada Hflr and Melar Acquisition

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Melar Acquisition. In addition to that, Armada Hflr is 4.2 times more volatile than Melar Acquisition Corp. It trades about -0.21 of its total potential returns per unit of risk. Melar Acquisition Corp is currently generating about 0.03 per unit of volatility. If you would invest  1,004  in Melar Acquisition Corp on September 19, 2024 and sell it today you would earn a total of  2.00  from holding Melar Acquisition Corp or generate 0.2% return on investment over 90 days.

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

Armada Hflr Pr  vs.  Melar Acquisition Corp

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

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

Melar Acquisition Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Melar Acquisition Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Melar Acquisition is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Armada Hflr and Melar Acquisition

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

The idea behind Armada Hflr Pr and Melar Acquisition Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.