Correlation Between Armada Hflr and Engie SA
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Engie SA 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 Engie SA 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 Engie SA, you can compare the effects of market volatilities on Armada Hflr and Engie SA 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 Engie SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Engie SA.
Diversification Opportunities for Armada Hflr and Engie SA
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Armada and Engie is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Engie SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Engie SA 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 Engie SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Engie SA has no effect on the direction of Armada Hflr i.e., Armada Hflr and Engie SA go up and down completely randomly.
Pair Corralation between Armada Hflr and Engie SA
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Engie SA. In addition to that, Armada Hflr is 1.64 times more volatile than Engie SA. It trades about -0.12 of its total potential returns per unit of risk. Engie SA is currently generating about -0.09 per unit of volatility. If you would invest 1,578 in Engie SA on September 20, 2024 and sell it today you would lose (92.00) from holding Engie SA or give up 5.83% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Armada Hflr Pr vs. Engie SA
Performance |
Timeline |
Armada Hflr Pr |
Engie SA |
Armada Hflr and Engie SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Armada Hflr and Engie SA
The main advantage of trading using opposite Armada Hflr and Engie SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Engie SA 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 Engie SA will offset losses from the drop in Engie SA'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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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