Correlation Between Armada Hflr and INVION

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

Diversification Opportunities for Armada Hflr and INVION

-0.09

Correlation Coefficient

Armada Hflr  INVION

Good diversification

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

Pair Corralation between Armada Hflr and INVION

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the INVION. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 55.74 times less risky than INVION. The stock trades about -0.02 of its potential returns per unit of risk. The INVION is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  15.00  in INVION on September 25, 2024 and sell it today you would earn a total of  2.00  from holding INVION or generate 13.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.66%
Values	Daily Returns

Armada Hflr Pr  vs.  INVION

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.

INVION

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INVION are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, INVION exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Armada Hflr and INVION

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

The idea behind Armada Hflr Pr and INVION 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.