Correlation Between Armada Hflr and TPI POLENE

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

Diversification Opportunities for Armada Hflr and TPI POLENE

0.89

Correlation Coefficient

Armada Hflr  TPI POLENE

Very poor diversification

The 3 months correlation between Armada and TPI is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and TPI POLENE POWER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPI POLENE POWER 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 TPI POLENE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPI POLENE POWER has no effect on the direction of Armada Hflr i.e., Armada Hflr and TPI POLENE go up and down completely randomly.

Pair Corralation between Armada Hflr and TPI POLENE

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the TPI POLENE. In addition to that, Armada Hflr is 1.32 times more volatile than TPI POLENE POWER. It trades about -0.2 of its total potential returns per unit of risk. TPI POLENE POWER is currently generating about -0.25 per unit of volatility. If you would invest  288.00  in TPI POLENE POWER on December 26, 2024 and sell it today you would lose (64.00) from holding TPI POLENE POWER or give up 22.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

Armada Hflr Pr  vs.  TPI POLENE POWER

Armada Hflr Pr

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

TPI POLENE POWER

Risk-Adjusted Performance

Very Weak

Over the last 90 days TPI POLENE POWER has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Armada Hflr and TPI POLENE

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

The idea behind Armada Hflr Pr and TPI POLENE POWER 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.