Correlation Between Armada Hflr and 83001WAC8

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and 83001WAC8 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 83001WAC8 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 Six Flags Theme, you can compare the effects of market volatilities on Armada Hflr and 83001WAC8 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 83001WAC8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and 83001WAC8.

Diversification Opportunities for Armada Hflr and 83001WAC8

-0.01

Correlation Coefficient

Armada Hflr  83001WAC8

Good diversification

The 3 months correlation between Armada and 83001WAC8 is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Six Flags Theme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Flags Theme 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 83001WAC8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Flags Theme has no effect on the direction of Armada Hflr i.e., Armada Hflr and 83001WAC8 go up and down completely randomly.

Pair Corralation between Armada Hflr and 83001WAC8

Considering the 90-day investment horizon Armada Hflr is expected to generate 184.29 times less return on investment than 83001WAC8. But when comparing it to its historical volatility, Armada Hflr Pr is 34.34 times less risky than 83001WAC8. It trades about 0.01 of its potential returns per unit of risk. Six Flags Theme is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  10,169  in Six Flags Theme on September 19, 2024 and sell it today you would earn a total of  3.00  from holding Six Flags Theme or generate 0.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	66.53%
Values	Daily Returns

Armada Hflr Pr  vs.  Six Flags Theme

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

Six Flags Theme

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Six Flags Theme are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 83001WAC8 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and 83001WAC8

The main advantage of trading using opposite Armada Hflr and 83001WAC8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, 83001WAC8 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 83001WAC8 will offset losses from the drop in 83001WAC8's long position.

The idea behind Armada Hflr Pr and Six Flags Theme 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .