Correlation Between Armada Hflr and Ximen Mining

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

Diversification Opportunities for Armada Hflr and Ximen Mining

0.56

Correlation Coefficient

Armada Hflr  Ximen Mining

Very weak diversification

The 3 months correlation between Armada and Ximen is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Ximen Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ximen Mining Corp 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 Ximen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ximen Mining Corp has no effect on the direction of Armada Hflr i.e., Armada Hflr and Ximen Mining go up and down completely randomly.

Pair Corralation between Armada Hflr and Ximen Mining

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Ximen Mining. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 6.52 times less risky than Ximen Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Ximen Mining Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Ximen Mining Corp on October 2, 2024 and sell it today you would lose (3.00) from holding Ximen Mining Corp or give up 30.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.4%
Values	Daily Returns

Armada Hflr Pr  vs.  Ximen Mining Corp

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.

Ximen Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ximen Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Armada Hflr and Ximen Mining

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

The idea behind Armada Hflr Pr and Ximen Mining Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.