Correlation Between Precinct Properties and Armada Hflr

Can any of the company-specific risk be diversified away by investing in both Precinct Properties and Armada Hflr 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 Precinct Properties and Armada Hflr into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Precinct Properties New and Armada Hflr Pr, you can compare the effects of market volatilities on Precinct Properties and Armada Hflr 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 Precinct Properties with a short position of Armada Hflr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precinct Properties and Armada Hflr.

Diversification Opportunities for Precinct Properties and Armada Hflr

0.18

Correlation Coefficient

Precinct Properties  Armada Hflr

Average diversification

The 3 months correlation between Precinct and Armada is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Precinct Properties New and Armada Hflr Pr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Hflr Pr and Precinct Properties 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 Precinct Properties New are associated (or correlated) with Armada Hflr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Hflr Pr has no effect on the direction of Precinct Properties i.e., Precinct Properties and Armada Hflr go up and down completely randomly.

Pair Corralation between Precinct Properties and Armada Hflr

Assuming the 90 days horizon Precinct Properties New is expected to generate 1.01 times more return on investment than Armada Hflr. However, Precinct Properties is 1.01 times more volatile than Armada Hflr Pr. It trades about -0.02 of its potential returns per unit of risk. Armada Hflr Pr is currently generating about -0.21 per unit of risk. If you would invest  68.00  in Precinct Properties New on December 29, 2024 and sell it today you would lose (2.00) from holding Precinct Properties New or give up 2.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	88.52%
Values	Daily Returns

Precinct Properties New  vs.  Armada Hflr Pr

Precinct Properties New

Risk-Adjusted Performance

Very Weak

Over the last 90 days Precinct Properties New has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Precinct Properties is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Armada Hflr Pr

Risk-Adjusted Performance

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 April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Precinct Properties and Armada Hflr

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

The idea behind Precinct Properties New and Armada Hflr Pr 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.