Correlation Between Armada Hflr and Amotiv

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

Diversification Opportunities for Armada Hflr and Amotiv

0.38

Correlation Coefficient

Armada Hflr  Amotiv

Weak diversification

The 3 months correlation between Armada and Amotiv is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Amotiv Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amotiv Limited 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 Amotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amotiv Limited has no effect on the direction of Armada Hflr i.e., Armada Hflr and Amotiv go up and down completely randomly.

Pair Corralation between Armada Hflr and Amotiv

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Amotiv. In addition to that, Armada Hflr is 1.41 times more volatile than Amotiv Limited. It trades about -0.28 of its total potential returns per unit of risk. Amotiv Limited is currently generating about -0.08 per unit of volatility. If you would invest  527.00  in Amotiv Limited on September 24, 2024 and sell it today you would lose (8.00) from holding Amotiv Limited or give up 1.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Armada Hflr Pr  vs.  Amotiv Limited

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.

Amotiv Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amotiv Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Armada Hflr and Amotiv

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

The idea behind Armada Hflr Pr and Amotiv Limited 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.