Correlation Between Armada Hflr and Tangerine Beach

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

Diversification Opportunities for Armada Hflr and Tangerine Beach

-0.27

Correlation Coefficient

Armada Hflr  Tangerine Beach

Very good diversification

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

Pair Corralation between Armada Hflr and Tangerine Beach

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Tangerine Beach. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.97 times less risky than Tangerine Beach. The stock trades about -0.02 of its potential returns per unit of risk. The Tangerine Beach Hotels is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  5,250  in Tangerine Beach Hotels on September 16, 2024 and sell it today you would earn a total of  2,050  from holding Tangerine Beach Hotels or generate 39.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.29%
Values	Daily Returns

Armada Hflr Pr  vs.  Tangerine Beach Hotels

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.

Tangerine Beach Hotels

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tangerine Beach Hotels are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tangerine Beach sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Armada Hflr and Tangerine Beach

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

The idea behind Armada Hflr Pr and Tangerine Beach Hotels 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.