Correlation Between Armada Hflr and BOE Technology

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

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

Diversification Opportunities for Armada Hflr and BOE Technology

-0.4

Correlation Coefficient

Armada Hflr  BOE Technology

Very good diversification

The 3 months correlation between Armada and BOE is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and BOE Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOE Technology Group and Armada Hflr 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 Hflr Pr are associated (or correlated) with BOE Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOE Technology Group has no effect on the direction of Armada Hflr i.e., Armada Hflr and BOE Technology go up and down completely randomly.

Pair Corralation between Armada Hflr and BOE Technology

Considering the 90-day investment horizon Armada Hflr is expected to generate 3.93 times less return on investment than BOE Technology. But when comparing it to its historical volatility, Armada Hflr Pr is 1.04 times less risky than BOE Technology. It trades about 0.01 of its potential returns per unit of risk. BOE Technology Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  354.00  in BOE Technology Group on September 27, 2024 and sell it today you would earn a total of  84.00  from holding BOE Technology Group or generate 23.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.18%
Values	Daily Returns

Armada Hflr Pr  vs.  BOE Technology Group

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 recent stock price confusion, may contribute to short-horizon losses for the traders.

BOE Technology Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BOE Technology Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BOE Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Armada Hflr and BOE Technology

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

The idea behind Armada Hflr Pr and BOE Technology Group 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 Stocks Directory module to find actively traded stocks across global markets.