Correlation Between Armada Hflr and ASR Nederland

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

Diversification Opportunities for Armada Hflr and ASR Nederland

-0.31

Correlation Coefficient

Armada Hflr  ASR Nederland

Very good diversification

The 3 months correlation between Armada and ASR is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and ASR Nederland NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASR Nederland NV 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 ASR Nederland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASR Nederland NV has no effect on the direction of Armada Hflr i.e., Armada Hflr and ASR Nederland go up and down completely randomly.

Pair Corralation between Armada Hflr and ASR Nederland

Considering the 90-day investment horizon Armada Hflr is expected to generate 2.62 times less return on investment than ASR Nederland. In addition to that, Armada Hflr is 1.06 times more volatile than ASR Nederland NV. It trades about 0.01 of its total potential returns per unit of risk. ASR Nederland NV is currently generating about 0.03 per unit of volatility. If you would invest  3,868  in ASR Nederland NV on September 20, 2024 and sell it today you would earn a total of  598.00  from holding ASR Nederland NV or generate 15.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.02%
Values	Daily Returns

Armada Hflr Pr  vs.  ASR Nederland NV

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 latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

ASR Nederland NV

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASR Nederland NV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ASR Nederland is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and ASR Nederland

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

The idea behind Armada Hflr Pr and ASR Nederland NV 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.