Correlation Between Armada Hflr and GULF ENERGY
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and GULF ENERGY 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 GULF ENERGY 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 GULF ENERGY DEVELOPMENT NVDR, you can compare the effects of market volatilities on Armada Hflr and GULF ENERGY 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 GULF ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and GULF ENERGY.
Diversification Opportunities for Armada Hflr and GULF ENERGY
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Armada and GULF is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and GULF ENERGY DEVELOPMENT NVDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GULF ENERGY DEVELOPMENT 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 GULF ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GULF ENERGY DEVELOPMENT has no effect on the direction of Armada Hflr i.e., Armada Hflr and GULF ENERGY go up and down completely randomly.
Pair Corralation between Armada Hflr and GULF ENERGY
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the GULF ENERGY. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 2.51 times less risky than GULF ENERGY. The stock trades about -0.12 of its potential returns per unit of risk. The GULF ENERGY DEVELOPMENT NVDR is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,750 in GULF ENERGY DEVELOPMENT NVDR on September 25, 2024 and sell it today you would earn a total of 1,200 from holding GULF ENERGY DEVELOPMENT NVDR or generate 25.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 93.75% |
Values | Daily Returns |
Armada Hflr Pr vs. GULF ENERGY DEVELOPMENT NVDR
Performance |
Timeline |
Armada Hflr Pr |
GULF ENERGY DEVELOPMENT |
Armada Hflr and GULF ENERGY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Armada Hflr and GULF ENERGY
The main advantage of trading using opposite Armada Hflr and GULF ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, GULF ENERGY 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 GULF ENERGY will offset losses from the drop in GULF ENERGY's long position.Armada Hflr vs. Realty Income | Armada Hflr vs. Park Hotels Resorts | Armada Hflr vs. Power REIT | Armada Hflr vs. Urban Edge Properties |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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