Correlation Between Armada Hflr and DKINYM

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

Diversification Opportunities for Armada Hflr and DKINYM

-0.74

Correlation Coefficient

Armada Hflr  DKINYM

Pay attention - limited upside

The 3 months correlation between Armada and DKINYM is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Investeringsforeningen Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investeringsforeningen 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 DKINYM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investeringsforeningen has no effect on the direction of Armada Hflr i.e., Armada Hflr and DKINYM go up and down completely randomly.

Pair Corralation between Armada Hflr and DKINYM

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the DKINYM. In addition to that, Armada Hflr is 1.87 times more volatile than Investeringsforeningen Danske Invest. It trades about -0.07 of its total potential returns per unit of risk. Investeringsforeningen Danske Invest is currently generating about 0.15 per unit of volatility. If you would invest  19,063  in Investeringsforeningen Danske Invest on September 13, 2024 and sell it today you would earn a total of  1,567  from holding Investeringsforeningen Danske Invest or generate 8.22% return on investment over 90 days.

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

Armada Hflr Pr  vs.  Investeringsforeningen Danske

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.

Investeringsforeningen

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Investeringsforeningen Danske Invest are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat conflicting forward indicators, DKINYM may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Armada Hflr and DKINYM

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

The idea behind Armada Hflr Pr and Investeringsforeningen Danske Invest 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.