Correlation Between Armada Hflr and Betashares Australian

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

Diversification Opportunities for Armada Hflr and Betashares Australian

-0.54

Correlation Coefficient

Armada Hflr  Betashares Australian

Excellent diversification

The 3 months correlation between Armada and Betashares is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Betashares Australian Major in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betashares Australian 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 Betashares Australian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betashares Australian has no effect on the direction of Armada Hflr i.e., Armada Hflr and Betashares Australian go up and down completely randomly.

Pair Corralation between Armada Hflr and Betashares Australian

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Betashares Australian. In addition to that, Armada Hflr is 20.12 times more volatile than Betashares Australian Major. It trades about -0.08 of its total potential returns per unit of risk. Betashares Australian Major is currently generating about 0.34 per unit of volatility. If you would invest  2,505  in Betashares Australian Major on September 15, 2024 and sell it today you would earn a total of  42.00  from holding Betashares Australian Major or generate 1.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Armada Hflr Pr  vs.  Betashares Australian Major

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.

Betashares Australian

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Betashares Australian Major are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Betashares Australian is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Armada Hflr and Betashares Australian

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

The idea behind Armada Hflr Pr and Betashares Australian Major 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.