Correlation Between Armada Hflr and Yunnan Copper

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Yunnan Copper 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 Yunnan Copper 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 Yunnan Copper Co, you can compare the effects of market volatilities on Armada Hflr and Yunnan Copper 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 Yunnan Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Yunnan Copper.

Diversification Opportunities for Armada Hflr and Yunnan Copper

-0.73

Correlation Coefficient

Armada Hflr  Yunnan Copper

Pay attention - limited upside

The 3 months correlation between Armada and Yunnan is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Yunnan Copper Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Copper 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 Yunnan Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Copper has no effect on the direction of Armada Hflr i.e., Armada Hflr and Yunnan Copper go up and down completely randomly.

Pair Corralation between Armada Hflr and Yunnan Copper

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Yunnan Copper. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.54 times less risky than Yunnan Copper. The stock trades about -0.08 of its potential returns per unit of risk. The Yunnan Copper Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,086  in Yunnan Copper Co on September 16, 2024 and sell it today you would earn a total of  204.00  from holding Yunnan Copper Co or generate 18.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.77%
Values	Daily Returns

Armada Hflr Pr  vs.  Yunnan Copper Co

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 latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Yunnan Copper

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yunnan Copper Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yunnan Copper sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Armada Hflr and Yunnan Copper

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

The idea behind Armada Hflr Pr and Yunnan Copper Co 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.