Correlation Between Armada Hflr and Pinduoduo

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

Diversification Opportunities for Armada Hflr and Pinduoduo

-0.04

Correlation Coefficient

Armada Hflr  Pinduoduo

Good diversification

The 3 months correlation between Armada and Pinduoduo is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Pinduoduo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinduoduo 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 Pinduoduo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinduoduo has no effect on the direction of Armada Hflr i.e., Armada Hflr and Pinduoduo go up and down completely randomly.

Pair Corralation between Armada Hflr and Pinduoduo

Considering the 90-day investment horizon Armada Hflr Pr is expected to generate 0.33 times more return on investment than Pinduoduo. However, Armada Hflr Pr is 3.04 times less risky than Pinduoduo. It trades about -0.07 of its potential returns per unit of risk. Pinduoduo is currently generating about -0.08 per unit of risk. If you would invest  1,080  in Armada Hflr Pr on September 26, 2024 and sell it today you would lose (57.00) from holding Armada Hflr Pr or give up 5.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Armada Hflr Pr  vs.  Pinduoduo

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.

Pinduoduo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pinduoduo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Armada Hflr and Pinduoduo

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

The idea behind Armada Hflr Pr and Pinduoduo 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.