Correlation Between Armada Hflr and Easycall Communications

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

Diversification Opportunities for Armada Hflr and Easycall Communications

0.03

Correlation Coefficient

Armada Hflr  Easycall Communications

Significant diversification

The 3 months correlation between Armada and Easycall is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Easycall Communications Philip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easycall Communications 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 Easycall Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easycall Communications has no effect on the direction of Armada Hflr i.e., Armada Hflr and Easycall Communications go up and down completely randomly.

Pair Corralation between Armada Hflr and Easycall Communications

Considering the 90-day investment horizon Armada Hflr is expected to generate 15.74 times less return on investment than Easycall Communications. But when comparing it to its historical volatility, Armada Hflr Pr is 7.67 times less risky than Easycall Communications. It trades about 0.02 of its potential returns per unit of risk. Easycall Communications Philippines is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  380.00  in Easycall Communications Philippines on September 18, 2024 and sell it today you would lose (120.00) from holding Easycall Communications Philippines or give up 31.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	39.8%
Values	Daily Returns

Armada Hflr Pr  vs.  Easycall Communications Philip

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.

Easycall Communications

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Easycall Communications Philippines are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Easycall Communications exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Armada Hflr and Easycall Communications

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

The idea behind Armada Hflr Pr and Easycall Communications Philippines 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.