Correlation Between Armada Hflr and Precious Metals

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

Diversification Opportunities for Armada Hflr and Precious Metals

0.63

Correlation Coefficient

Armada Hflr  Precious Metals

Poor diversification

The 3 months correlation between Armada and Precious is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Precious Metals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals And 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 Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals And has no effect on the direction of Armada Hflr i.e., Armada Hflr and Precious Metals go up and down completely randomly.

Pair Corralation between Armada Hflr and Precious Metals

Considering the 90-day investment horizon Armada Hflr is expected to generate 10.27 times less return on investment than Precious Metals. But when comparing it to its historical volatility, Armada Hflr Pr is 1.07 times less risky than Precious Metals. It trades about 0.0 of its potential returns per unit of risk. Precious Metals And is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,740  in Precious Metals And on October 7, 2024 and sell it today you would earn a total of  177.00  from holding Precious Metals And or generate 10.17% return on investment over 90 days.

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

Armada Hflr Pr  vs.  Precious Metals And

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 fairly strong technical indicators, Armada Hflr is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Precious Metals And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Precious Metals And has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Armada Hflr and Precious Metals

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

The idea behind Armada Hflr Pr and Precious Metals And 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.