Correlation Between Armada Hflr and Pimco Rae

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

Diversification Opportunities for Armada Hflr and Pimco Rae

0.77

Correlation Coefficient

Armada Hflr  Pimco Rae

Poor diversification

The 3 months correlation between Armada and Pimco is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Pimco Rae Fundamental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Rae Fundamental 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 Pimco Rae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Rae Fundamental has no effect on the direction of Armada Hflr i.e., Armada Hflr and Pimco Rae go up and down completely randomly.

Pair Corralation between Armada Hflr and Pimco Rae

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Pimco Rae. In addition to that, Armada Hflr is 1.89 times more volatile than Pimco Rae Fundamental. It trades about 0.0 of its total potential returns per unit of risk. Pimco Rae Fundamental is currently generating about 0.03 per unit of volatility. If you would invest  854.00  in Pimco Rae Fundamental on October 13, 2024 and sell it today you would earn a total of  103.00  from holding Pimco Rae Fundamental or generate 12.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Armada Hflr Pr  vs.  Pimco Rae Fundamental

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.

Pimco Rae Fundamental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco Rae Fundamental has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Armada Hflr and Pimco Rae

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

The idea behind Armada Hflr Pr and Pimco Rae Fundamental 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.