Correlation Between Armada Hflr and 21036PBN7

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and 21036PBN7 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 21036PBN7 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 STZ 5 02 FEB 26, you can compare the effects of market volatilities on Armada Hflr and 21036PBN7 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 21036PBN7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and 21036PBN7.

Diversification Opportunities for Armada Hflr and 21036PBN7

0.45

Correlation Coefficient

Armada Hflr  21036PBN7

Very weak diversification

The 3 months correlation between Armada and 21036PBN7 is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and STZ 5 02 FEB 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 21036PBN7 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 21036PBN7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 21036PBN7 has no effect on the direction of Armada Hflr i.e., Armada Hflr and 21036PBN7 go up and down completely randomly.

Pair Corralation between Armada Hflr and 21036PBN7

Considering the 90-day investment horizon Armada Hflr Pr is expected to generate 6.1 times more return on investment than 21036PBN7. However, Armada Hflr is 6.1 times more volatile than STZ 5 02 FEB 26. It trades about 0.0 of its potential returns per unit of risk. STZ 5 02 FEB 26 is currently generating about 0.0 per unit of risk. If you would invest  1,062  in Armada Hflr Pr on October 3, 2024 and sell it today you would lose (39.00) from holding Armada Hflr Pr or give up 3.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.13%
Values	Daily Returns

Armada Hflr Pr  vs.  STZ 5 02 FEB 26

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.

21036PBN7

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STZ 5 02 FEB 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 21036PBN7 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and 21036PBN7

The main advantage of trading using opposite Armada Hflr and 21036PBN7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, 21036PBN7 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 21036PBN7 will offset losses from the drop in 21036PBN7's long position.

The idea behind Armada Hflr Pr and STZ 5 02 FEB 26 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.