Correlation Between Armada Hflr and Voya Retirement

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

Diversification Opportunities for Armada Hflr and Voya Retirement

0.02

Correlation Coefficient

Armada Hflr  Voya Retirement

Significant diversification

The 3 months correlation between Armada and Voya is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Voya Retirement Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Retirement Moderate 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 Voya Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Retirement Moderate has no effect on the direction of Armada Hflr i.e., Armada Hflr and Voya Retirement go up and down completely randomly.

Pair Corralation between Armada Hflr and Voya Retirement

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Voya Retirement. In addition to that, Armada Hflr is 2.43 times more volatile than Voya Retirement Moderate. It trades about -0.21 of its total potential returns per unit of risk. Voya Retirement Moderate is currently generating about -0.09 per unit of volatility. If you would invest  1,097  in Voya Retirement Moderate on September 22, 2024 and sell it today you would lose (12.00) from holding Voya Retirement Moderate or give up 1.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Armada Hflr Pr  vs.  Voya Retirement Moderate

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.

Voya Retirement Moderate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Retirement Moderate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Voya Retirement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and Voya Retirement

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

The idea behind Armada Hflr Pr and Voya Retirement Moderate 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.