Correlation Between Armada Hflr and ZKB Platinum

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

Diversification Opportunities for Armada Hflr and ZKB Platinum

0.27

Correlation Coefficient

Armada Hflr  ZKB Platinum

Modest diversification

The 3 months correlation between Armada and ZKB is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and ZKB Platinum ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZKB Platinum ETF 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 ZKB Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZKB Platinum ETF has no effect on the direction of Armada Hflr i.e., Armada Hflr and ZKB Platinum go up and down completely randomly.

Pair Corralation between Armada Hflr and ZKB Platinum

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the ZKB Platinum. In addition to that, Armada Hflr is 1.08 times more volatile than ZKB Platinum ETF. It trades about -0.28 of its total potential returns per unit of risk. ZKB Platinum ETF is currently generating about -0.06 per unit of volatility. If you would invest  24,550  in ZKB Platinum ETF on September 30, 2024 and sell it today you would lose (345.00) from holding ZKB Platinum ETF or give up 1.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

Armada Hflr Pr  vs.  ZKB Platinum ETF

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 recent stock price confusion, may contribute to short-horizon losses for the traders.

ZKB Platinum ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZKB Platinum ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ZKB Platinum is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Armada Hflr and ZKB Platinum

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

The idea behind Armada Hflr Pr and ZKB Platinum ETF 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 Commodity Directory module to find actively traded commodities issued by global exchanges.