Correlation Between Armada Hflr and Donegal Investment

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

Diversification Opportunities for Armada Hflr and Donegal Investment

0.06

Correlation Coefficient

Armada Hflr  Donegal Investment

Significant diversification

The 3 months correlation between Armada and Donegal is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Donegal Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Donegal Investment 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 Donegal Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Donegal Investment has no effect on the direction of Armada Hflr i.e., Armada Hflr and Donegal Investment go up and down completely randomly.

Pair Corralation between Armada Hflr and Donegal Investment

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Donegal Investment. In addition to that, Armada Hflr is 6.72 times more volatile than Donegal Investment Group. It trades about -0.07 of its total potential returns per unit of risk. Donegal Investment Group is currently generating about 0.04 per unit of volatility. If you would invest  1,650  in Donegal Investment Group on September 18, 2024 and sell it today you would earn a total of  10.00  from holding Donegal Investment Group or generate 0.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Armada Hflr Pr  vs.  Donegal Investment Group

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.

Donegal Investment

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Donegal Investment Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Donegal Investment is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Armada Hflr and Donegal Investment

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

The idea behind Armada Hflr Pr and Donegal Investment Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.