Correlation Between Ameritrust Corp and Armada Mercantile

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

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

Diversification Opportunities for Ameritrust Corp and Armada Mercantile

0.0

Correlation Coefficient

Ameritrust Corp  Armada Mercantile

Pay attention - limited upside

The 3 months correlation between Ameritrust and Armada is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ameritrust Corp and Armada Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Mercantile and Ameritrust Corp 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 Ameritrust Corp are associated (or correlated) with Armada Mercantile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Mercantile has no effect on the direction of Ameritrust Corp i.e., Ameritrust Corp and Armada Mercantile go up and down completely randomly.

Pair Corralation between Ameritrust Corp and Armada Mercantile

If you would invest  0.02  in Ameritrust Corp on August 31, 2024 and sell it today you would earn a total of  0.00  from holding Ameritrust Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ameritrust Corp  vs.  Armada Mercantile

Ameritrust Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ameritrust Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Ameritrust Corp is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Armada Mercantile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Mercantile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ameritrust Corp and Armada Mercantile

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

The idea behind Ameritrust Corp and Armada Mercantile 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.