Correlation Between Armada Hflr and Xp Properties

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

Diversification Opportunities for Armada Hflr and Xp Properties

0.6

Correlation Coefficient

Armada Hflr  Xp Properties

Poor diversification

The 3 months correlation between Armada and XPPR11 is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Xp Properties Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Properties Fundo 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 Xp Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Properties Fundo has no effect on the direction of Armada Hflr i.e., Armada Hflr and Xp Properties go up and down completely randomly.

Pair Corralation between Armada Hflr and Xp Properties

Considering the 90-day investment horizon Armada Hflr Pr is expected to generate 1.26 times more return on investment than Xp Properties. However, Armada Hflr is 1.26 times more volatile than Xp Properties Fundo. It trades about 0.02 of its potential returns per unit of risk. Xp Properties Fundo is currently generating about -0.15 per unit of risk. If you would invest  1,062  in Armada Hflr Pr on September 15, 2024 and sell it today you would earn a total of  30.00  from holding Armada Hflr Pr or generate 2.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Armada Hflr Pr  vs.  Xp Properties Fundo

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 latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Xp Properties Fundo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xp Properties Fundo has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Armada Hflr and Xp Properties

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

The idea behind Armada Hflr Pr and Xp Properties Fundo 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.