Correlation Between Armada Hflr and Radiant Utama

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

Diversification Opportunities for Armada Hflr and Radiant Utama

0.15

Correlation Coefficient

Armada Hflr  Radiant Utama

Average diversification

The 3 months correlation between Armada and Radiant is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Radiant Utama Interinsco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radiant Utama Interinsco 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 Radiant Utama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radiant Utama Interinsco has no effect on the direction of Armada Hflr i.e., Armada Hflr and Radiant Utama go up and down completely randomly.

Pair Corralation between Armada Hflr and Radiant Utama

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Radiant Utama. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.51 times less risky than Radiant Utama. The stock trades about -0.11 of its potential returns per unit of risk. The Radiant Utama Interinsco is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  17,000  in Radiant Utama Interinsco on September 12, 2024 and sell it today you would earn a total of  500.00  from holding Radiant Utama Interinsco or generate 2.94% return on investment over 90 days.

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

Armada Hflr Pr  vs.  Radiant Utama Interinsco

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.

Radiant Utama Interinsco

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Radiant Utama Interinsco has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Radiant Utama is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Armada Hflr and Radiant Utama

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

The idea behind Armada Hflr Pr and Radiant Utama Interinsco 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..