Correlation Between Armada Hflr and State Farm
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and State Farm 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 State Farm 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 State Farm Municipal, you can compare the effects of market volatilities on Armada Hflr and State Farm 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 State Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and State Farm.
Diversification Opportunities for Armada Hflr and State Farm
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Armada and State is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and State Farm Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Farm Municipal 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 State Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Farm Municipal has no effect on the direction of Armada Hflr i.e., Armada Hflr and State Farm go up and down completely randomly.
Pair Corralation between Armada Hflr and State Farm
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the State Farm. In addition to that, Armada Hflr is 11.44 times more volatile than State Farm Municipal. It trades about -0.2 of its total potential returns per unit of risk. State Farm Municipal is currently generating about 0.02 per unit of volatility. If you would invest 800.00 in State Farm Municipal on December 27, 2024 and sell it today you would earn a total of 2.00 from holding State Farm Municipal or generate 0.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.36% |
Values | Daily Returns |
Armada Hflr Pr vs. State Farm Municipal
Performance |
Timeline |
Armada Hflr Pr |
State Farm Municipal |
Armada Hflr and State Farm Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Armada Hflr and State Farm
The main advantage of trading using opposite Armada Hflr and State Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, State Farm 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 State Farm will offset losses from the drop in State Farm's long position.Armada Hflr vs. Modiv Inc | Armada Hflr vs. Precinct Properties New | Armada Hflr vs. Global Net Lease | Armada Hflr vs. NexPoint Diversified Real |
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Check out your portfolio center.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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