Correlation Between Armada Hflr and JSC National

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

Diversification Opportunities for Armada Hflr and JSC National

-0.43

Correlation Coefficient

Armada Hflr  JSC National

Very good diversification

The 3 months correlation between Armada and JSC is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and JSC National Atomic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSC National Atomic 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 JSC National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSC National Atomic has no effect on the direction of Armada Hflr i.e., Armada Hflr and JSC National go up and down completely randomly.

Pair Corralation between Armada Hflr and JSC National

Considering the 90-day investment horizon Armada Hflr is expected to generate 8.66 times less return on investment than JSC National. But when comparing it to its historical volatility, Armada Hflr Pr is 1.61 times less risky than JSC National. It trades about 0.01 of its potential returns per unit of risk. JSC National Atomic is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,221  in JSC National Atomic on September 19, 2024 and sell it today you would earn a total of  1,369  from holding JSC National Atomic or generate 61.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.02%
Values	Daily Returns

Armada Hflr Pr  vs.  JSC National Atomic

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 weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

JSC National Atomic

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JSC National Atomic are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, JSC National may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Armada Hflr and JSC National

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

The idea behind Armada Hflr Pr and JSC National Atomic 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .