Correlation Between Armada Hflr and BlackRock ETF

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

Diversification Opportunities for Armada Hflr and BlackRock ETF

0.01

Correlation Coefficient

Armada Hflr  BlackRock ETF

Significant diversification

The 3 months correlation between Armada and BlackRock is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and BlackRock ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock ETF Trust 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 BlackRock ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock ETF Trust has no effect on the direction of Armada Hflr i.e., Armada Hflr and BlackRock ETF go up and down completely randomly.

Pair Corralation between Armada Hflr and BlackRock ETF

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the BlackRock ETF. In addition to that, Armada Hflr is 2.5 times more volatile than BlackRock ETF Trust. It trades about -0.12 of its total potential returns per unit of risk. BlackRock ETF Trust is currently generating about 0.25 per unit of volatility. If you would invest  3,233  in BlackRock ETF Trust on September 20, 2024 and sell it today you would earn a total of  79.00  from holding BlackRock ETF Trust or generate 2.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	23.81%
Values	Daily Returns

Armada Hflr Pr  vs.  BlackRock ETF Trust

Armada Hflr Pr

Risk-Adjusted Performance

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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.

BlackRock ETF Trust

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days BlackRock ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very fragile technical indicators, BlackRock ETF may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Armada Hflr and BlackRock ETF

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

The idea behind Armada Hflr Pr and BlackRock ETF Trust 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.