Correlation Between Armada Hflr and IBI Mutual

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

Diversification Opportunities for Armada Hflr and IBI Mutual

-0.46

Correlation Coefficient

Armada Hflr  IBI Mutual

Very good diversification

The 3 months correlation between Armada and IBI is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and IBI Mutual Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBI Mutual Funds 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 IBI Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBI Mutual Funds has no effect on the direction of Armada Hflr i.e., Armada Hflr and IBI Mutual go up and down completely randomly.

Pair Corralation between Armada Hflr and IBI Mutual

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the IBI Mutual. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.7 times less risky than IBI Mutual. The stock trades about -0.21 of its potential returns per unit of risk. The IBI Mutual Funds is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  7,910  in IBI Mutual Funds on September 21, 2024 and sell it today you would lose (160.00) from holding IBI Mutual Funds or give up 2.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.71%
Values	Daily Returns

Armada Hflr Pr  vs.  IBI Mutual Funds

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 weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

IBI Mutual Funds

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IBI Mutual Funds are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, IBI Mutual sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Armada Hflr and IBI Mutual

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

The idea behind Armada Hflr Pr and IBI Mutual Funds 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.