Correlation Between Armada Hflr and Great-west Multi-manager

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Great-west Multi-manager 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 Great-west Multi-manager 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 Great West Multi Manager Large, you can compare the effects of market volatilities on Armada Hflr and Great-west Multi-manager 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 Great-west Multi-manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Great-west Multi-manager.

Diversification Opportunities for Armada Hflr and Great-west Multi-manager

0.49

Correlation Coefficient

Armada Hflr  Great-west Multi-manager

Very weak diversification

The 3 months correlation between Armada and Great-west is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Great West Multi Manager Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great-west Multi-manager 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 Great-west Multi-manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great-west Multi-manager has no effect on the direction of Armada Hflr i.e., Armada Hflr and Great-west Multi-manager go up and down completely randomly.

Pair Corralation between Armada Hflr and Great-west Multi-manager

Considering the 90-day investment horizon Armada Hflr Pr is expected to generate 0.62 times more return on investment than Great-west Multi-manager. However, Armada Hflr Pr is 1.62 times less risky than Great-west Multi-manager. It trades about -0.35 of its potential returns per unit of risk. Great West Multi Manager Large is currently generating about -0.26 per unit of risk. If you would invest  1,077  in Armada Hflr Pr on October 16, 2024 and sell it today you would lose (103.00) from holding Armada Hflr Pr or give up 9.56% of portfolio value over 90 days.

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

Armada Hflr Pr  vs.  Great West Multi Manager Large

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 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.

Great-west Multi-manager

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Great West Multi Manager Large has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Armada Hflr and Great-west Multi-manager

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

The idea behind Armada Hflr Pr and Great West Multi Manager Large 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.