Correlation Between Armada Hflr and HIAG Immobilien

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

Diversification Opportunities for Armada Hflr and HIAG Immobilien

-0.47

Correlation Coefficient

Armada Hflr  HIAG Immobilien

Very good diversification

The 3 months correlation between Armada and HIAG is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and HIAG Immobilien Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIAG Immobilien Holding 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 HIAG Immobilien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIAG Immobilien Holding has no effect on the direction of Armada Hflr i.e., Armada Hflr and HIAG Immobilien go up and down completely randomly.

Pair Corralation between Armada Hflr and HIAG Immobilien

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the HIAG Immobilien. In addition to that, Armada Hflr is 1.14 times more volatile than HIAG Immobilien Holding. It trades about -0.07 of its total potential returns per unit of risk. HIAG Immobilien Holding is currently generating about 0.19 per unit of volatility. If you would invest  8,140  in HIAG Immobilien Holding on September 14, 2024 and sell it today you would earn a total of  240.00  from holding HIAG Immobilien Holding or generate 2.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Armada Hflr Pr  vs.  HIAG Immobilien Holding

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.

HIAG Immobilien Holding

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HIAG Immobilien Holding are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, HIAG Immobilien is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Armada Hflr and HIAG Immobilien

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

The idea behind Armada Hflr Pr and HIAG Immobilien Holding 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.