Correlation Between Armada Hflr and New Era

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

Diversification Opportunities for Armada Hflr and New Era

-0.03

Correlation Coefficient

Armada Hflr  New Era

Good diversification

The 3 months correlation between Armada and New is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and New Era Helium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Era Helium 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 New Era. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Era Helium has no effect on the direction of Armada Hflr i.e., Armada Hflr and New Era go up and down completely randomly.

Pair Corralation between Armada Hflr and New Era

Considering the 90-day investment horizon Armada Hflr Pr is expected to generate 0.09 times more return on investment than New Era. However, Armada Hflr Pr is 11.71 times less risky than New Era. It trades about -0.21 of its potential returns per unit of risk. New Era Helium is currently generating about -0.36 per unit of risk. If you would invest  1,107  in Armada Hflr Pr on September 19, 2024 and sell it today you would lose (78.00) from holding Armada Hflr Pr or give up 7.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	36.36%
Values	Daily Returns

Armada Hflr Pr  vs.  New Era Helium

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.

New Era Helium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New Era Helium has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Armada Hflr and New Era

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

The idea behind Armada Hflr Pr and New Era Helium 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..