Correlation Between Armada Hflr and SPDR Dow
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and SPDR Dow 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 SPDR Dow 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 SPDR Dow Jones, you can compare the effects of market volatilities on Armada Hflr and SPDR Dow 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 SPDR Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and SPDR Dow.
Diversification Opportunities for Armada Hflr and SPDR Dow
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Armada and SPDR is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and SPDR Dow Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Dow Jones 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 SPDR Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Dow Jones has no effect on the direction of Armada Hflr i.e., Armada Hflr and SPDR Dow go up and down completely randomly.
Pair Corralation between Armada Hflr and SPDR Dow
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the SPDR Dow. In addition to that, Armada Hflr is 1.58 times more volatile than SPDR Dow Jones. It trades about -0.01 of its total potential returns per unit of risk. SPDR Dow Jones is currently generating about 0.09 per unit of volatility. If you would invest 1,970 in SPDR Dow Jones on September 13, 2024 and sell it today you would earn a total of 236.00 from holding SPDR Dow Jones or generate 11.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 97.33% |
Values | Daily Returns |
Armada Hflr Pr vs. SPDR Dow Jones
Performance |
Timeline |
Armada Hflr Pr |
SPDR Dow Jones |
Armada Hflr and SPDR Dow Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Armada Hflr and SPDR Dow
The main advantage of trading using opposite Armada Hflr and SPDR Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, SPDR Dow 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 SPDR Dow will offset losses from the drop in SPDR Dow's long position.Armada Hflr vs. Modiv Inc | Armada Hflr vs. Precinct Properties New | Armada Hflr vs. Global Net Lease | Armada Hflr vs. NexPoint Diversified Real |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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