Correlation Between Blockmate Ventures and Armada Mercantile

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

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

Diversification Opportunities for Blockmate Ventures and Armada Mercantile

0.09

Correlation Coefficient

Blockmate Ventures  Armada Mercantile

Significant diversification

The 3 months correlation between Blockmate and Armada is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Blockmate Ventures and Armada Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Mercantile and Blockmate Ventures 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 Blockmate Ventures 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 Blockmate Ventures i.e., Blockmate Ventures and Armada Mercantile go up and down completely randomly.

Pair Corralation between Blockmate Ventures and Armada Mercantile

Assuming the 90 days horizon Blockmate Ventures is expected to under-perform the Armada Mercantile. But the otc stock apears to be less risky and, when comparing its historical volatility, Blockmate Ventures is 2.02 times less risky than Armada Mercantile. The otc stock trades about -0.15 of its potential returns per unit of risk. The Armada Mercantile is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  30.00  in Armada Mercantile on December 30, 2024 and sell it today you would lose (10.00) from holding Armada Mercantile or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Blockmate Ventures  vs.  Armada Mercantile

Blockmate Ventures

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blockmate Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Armada Mercantile

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Armada Mercantile are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Armada Mercantile reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blockmate Ventures and Armada Mercantile

The main advantage of trading using opposite Blockmate Ventures and Armada Mercantile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blockmate Ventures 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 Blockmate Ventures 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.