Correlation Between Armada Hflr and INTERNATIONAL ENERGY

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

Diversification Opportunities for Armada Hflr and INTERNATIONAL ENERGY

0.41

Correlation Coefficient

Armada Hflr  INTERNATIONAL ENERGY

Very weak diversification

The 3 months correlation between Armada and INTERNATIONAL is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and INTERNATIONAL ENERGY INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERNATIONAL ENERGY 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 INTERNATIONAL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERNATIONAL ENERGY has no effect on the direction of Armada Hflr i.e., Armada Hflr and INTERNATIONAL ENERGY go up and down completely randomly.

Pair Corralation between Armada Hflr and INTERNATIONAL ENERGY

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the INTERNATIONAL ENERGY. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.91 times less risky than INTERNATIONAL ENERGY. The stock trades about -0.07 of its potential returns per unit of risk. The INTERNATIONAL ENERGY INSURANCE is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  158.00  in INTERNATIONAL ENERGY INSURANCE on September 13, 2024 and sell it today you would lose (11.00) from holding INTERNATIONAL ENERGY INSURANCE or give up 6.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Armada Hflr Pr  vs.  INTERNATIONAL ENERGY INSURANCE

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 fairly strong technical indicators, Armada Hflr is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

INTERNATIONAL ENERGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTERNATIONAL ENERGY INSURANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, INTERNATIONAL ENERGY is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Armada Hflr and INTERNATIONAL ENERGY

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

The idea behind Armada Hflr Pr and INTERNATIONAL ENERGY INSURANCE 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.