Correlation Between Armada Hflr and IShares JP

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

Diversification Opportunities for Armada Hflr and IShares JP

0.45

Correlation Coefficient

Armada Hflr  IShares JP

Very weak diversification

The 3 months correlation between Armada and IShares is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and iShares JP Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares JP Morgan 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 IShares JP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares JP Morgan has no effect on the direction of Armada Hflr i.e., Armada Hflr and IShares JP go up and down completely randomly.

Pair Corralation between Armada Hflr and IShares JP

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the IShares JP. In addition to that, Armada Hflr is 2.09 times more volatile than iShares JP Morgan. It trades about -0.05 of its total potential returns per unit of risk. iShares JP Morgan is currently generating about 0.13 per unit of volatility. If you would invest  425.00  in iShares JP Morgan on September 18, 2024 and sell it today you would earn a total of  4.00  from holding iShares JP Morgan or generate 0.94% return on investment over 90 days.

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

Armada Hflr Pr  vs.  iShares JP Morgan

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.

iShares JP Morgan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares JP Morgan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, IShares JP is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Armada Hflr and IShares JP

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

The idea behind Armada Hflr Pr and iShares JP Morgan 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.