Correlation Between Armada Mercantile and Cypherpunk Holdings

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

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

Diversification Opportunities for Armada Mercantile and Cypherpunk Holdings

-0.37

Correlation Coefficient

Armada Mercantile  Cypherpunk Holdings

Very good diversification

The 3 months correlation between Armada and Cypherpunk is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Armada Mercantile and Cypherpunk Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cypherpunk Holdings and Armada Mercantile 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 Mercantile are associated (or correlated) with Cypherpunk Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cypherpunk Holdings has no effect on the direction of Armada Mercantile i.e., Armada Mercantile and Cypherpunk Holdings go up and down completely randomly.

Pair Corralation between Armada Mercantile and Cypherpunk Holdings

Assuming the 90 days horizon Armada Mercantile is expected to under-perform the Cypherpunk Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Armada Mercantile is 4.04 times less risky than Cypherpunk Holdings. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Cypherpunk Holdings is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Cypherpunk Holdings on September 23, 2024 and sell it today you would earn a total of  174.00  from holding Cypherpunk Holdings or generate 1581.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Armada Mercantile  vs.  Cypherpunk Holdings

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Cypherpunk Holdings

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cypherpunk Holdings are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Cypherpunk Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Armada Mercantile and Cypherpunk Holdings

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

The idea behind Armada Mercantile and Cypherpunk Holdings 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.

Check out your portfolio center.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.