Correlation Between Armada Hflr and Americafirst Tactical

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

Diversification Opportunities for Armada Hflr and Americafirst Tactical

-0.22

Correlation Coefficient

Armada Hflr  Americafirst Tactical

Very good diversification

The 3 months correlation between Armada and Americafirst is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Americafirst Tactical Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Tactical 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 Americafirst Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Tactical has no effect on the direction of Armada Hflr i.e., Armada Hflr and Americafirst Tactical go up and down completely randomly.

Pair Corralation between Armada Hflr and Americafirst Tactical

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Americafirst Tactical. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.16 times less risky than Americafirst Tactical. The stock trades about -0.29 of its potential returns per unit of risk. The Americafirst Tactical Alpha is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  1,851  in Americafirst Tactical Alpha on September 23, 2024 and sell it today you would lose (71.00) from holding Americafirst Tactical Alpha or give up 3.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Armada Hflr Pr  vs.  Americafirst Tactical Alpha

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.

Americafirst Tactical

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Americafirst Tactical Alpha are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Americafirst Tactical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Armada Hflr and Americafirst Tactical

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

The idea behind Armada Hflr Pr and Americafirst Tactical Alpha 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.