Correlation Between Armada Hflr and Baron Real

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

Diversification Opportunities for Armada Hflr and Baron Real

0.49

Correlation Coefficient

Armada Hflr  Baron Real

Very weak diversification

The 3 months correlation between Armada and Baron is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Baron Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Real Estate 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 Baron Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Real Estate has no effect on the direction of Armada Hflr i.e., Armada Hflr and Baron Real go up and down completely randomly.

Pair Corralation between Armada Hflr and Baron Real

Considering the 90-day investment horizon Armada Hflr Pr is expected to generate 1.1 times more return on investment than Baron Real. However, Armada Hflr is 1.1 times more volatile than Baron Real Estate. It trades about -0.26 of its potential returns per unit of risk. Baron Real Estate is currently generating about -0.34 per unit of risk. If you would invest  1,083  in Armada Hflr Pr on September 29, 2024 and sell it today you would lose (72.00) from holding Armada Hflr Pr or give up 6.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Armada Hflr Pr  vs.  Baron Real Estate

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.

Baron Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baron Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Baron Real is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and Baron Real

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

The idea behind Armada Hflr Pr and Baron Real Estate 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.