Correlation Between Global Medical and Armada Hflr

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

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

Diversification Opportunities for Global Medical and Armada Hflr

0.65

Correlation Coefficient

Global Medical  Armada Hflr

Poor diversification

The 3 months correlation between Global and Armada is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Global Medical REIT 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 Global Medical 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 Global Medical REIT 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 Global Medical i.e., Global Medical and Armada Hflr go up and down completely randomly.

Pair Corralation between Global Medical and Armada Hflr

Given the investment horizon of 90 days Global Medical REIT is expected to under-perform the Armada Hflr. In addition to that, Global Medical is 1.05 times more volatile than Armada Hflr Pr. It trades about 0.0 of its total potential returns per unit of risk. Armada Hflr Pr is currently generating about 0.01 per unit of volatility. If you would invest  991.00  in Armada Hflr Pr on October 5, 2024 and sell it today you would earn a total of  29.00  from holding Armada Hflr Pr or generate 2.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Global Medical REIT  vs.  Armada Hflr Pr

Global Medical REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Medical REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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.

Pair Trading with Global Medical and Armada Hflr

The main advantage of trading using opposite Global Medical and Armada Hflr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Medical 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 Global Medical REIT 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.