Correlation Between Armada Hflr and Rex Trueform

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

Diversification Opportunities for Armada Hflr and Rex Trueform

-0.27

Correlation Coefficient

Armada Hflr  Rex Trueform

Very good diversification

The 3 months correlation between Armada and Rex is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Rex Trueform Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rex Trueform Group 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 Rex Trueform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rex Trueform Group has no effect on the direction of Armada Hflr i.e., Armada Hflr and Rex Trueform go up and down completely randomly.

Pair Corralation between Armada Hflr and Rex Trueform

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Rex Trueform. In addition to that, Armada Hflr is 3.15 times more volatile than Rex Trueform Group. It trades about -0.12 of its total potential returns per unit of risk. Rex Trueform Group is currently generating about 0.06 per unit of volatility. If you would invest  115,700  in Rex Trueform Group on October 12, 2024 and sell it today you would earn a total of  1,500  from holding Rex Trueform Group or generate 1.3% 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.  Rex Trueform Group

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.

Rex Trueform Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rex Trueform Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Rex Trueform is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Armada Hflr and Rex Trueform

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

The idea behind Armada Hflr Pr and Rex Trueform Group 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.