Correlation Between Armada Hflr and Evolve Active

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

Diversification Opportunities for Armada Hflr and Evolve Active

-0.55

Correlation Coefficient

Armada Hflr  Evolve Active

Excellent diversification

The 3 months correlation between Armada and Evolve is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Evolve Active Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Active Canadian 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 Evolve Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Active Canadian has no effect on the direction of Armada Hflr i.e., Armada Hflr and Evolve Active go up and down completely randomly.

Pair Corralation between Armada Hflr and Evolve Active

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Evolve Active. In addition to that, Armada Hflr is 4.25 times more volatile than Evolve Active Canadian. It trades about -0.06 of its total potential returns per unit of risk. Evolve Active Canadian is currently generating about 0.1 per unit of volatility. If you would invest  1,596  in Evolve Active Canadian on September 29, 2024 and sell it today you would earn a total of  25.00  from holding Evolve Active Canadian or generate 1.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Armada Hflr Pr  vs.  Evolve Active Canadian

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.

Evolve Active Canadian

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Evolve Active Canadian are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Evolve Active is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and Evolve Active

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

The idea behind Armada Hflr Pr and Evolve Active Canadian 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.