Correlation Between Armada Hflr and Gold Rain

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

Diversification Opportunities for Armada Hflr and Gold Rain

-0.09

Correlation Coefficient

Armada Hflr  Gold Rain

Good diversification

The 3 months correlation between Armada and Gold is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Gold Rain Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Rain Enterprises 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 Gold Rain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Rain Enterprises has no effect on the direction of Armada Hflr i.e., Armada Hflr and Gold Rain go up and down completely randomly.

Pair Corralation between Armada Hflr and Gold Rain

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Gold Rain. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.82 times less risky than Gold Rain. The stock trades about -0.07 of its potential returns per unit of risk. The Gold Rain Enterprises is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  5,140  in Gold Rain Enterprises on September 30, 2024 and sell it today you would lose (140.00) from holding Gold Rain Enterprises or give up 2.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Armada Hflr Pr  vs.  Gold Rain Enterprises

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.

Gold Rain Enterprises

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold Rain Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Gold Rain is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Armada Hflr and Gold Rain

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

The idea behind Armada Hflr Pr and Gold Rain Enterprises 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..