Correlation Between Armada Hflr and KBC Ancora

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

Diversification Opportunities for Armada Hflr and KBC Ancora

-0.06

Correlation Coefficient

Armada Hflr  KBC Ancora

Good diversification

The 3 months correlation between Armada and KBC is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and KBC Ancora SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Ancora SCA 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 KBC Ancora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC Ancora SCA has no effect on the direction of Armada Hflr i.e., Armada Hflr and KBC Ancora go up and down completely randomly.

Pair Corralation between Armada Hflr and KBC Ancora

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the KBC Ancora. In addition to that, Armada Hflr is 1.21 times more volatile than KBC Ancora SCA. It trades about -0.14 of its total potential returns per unit of risk. KBC Ancora SCA is currently generating about 0.03 per unit of volatility. If you would invest  4,850  in KBC Ancora SCA on September 25, 2024 and sell it today you would earn a total of  95.00  from holding KBC Ancora SCA or generate 1.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Armada Hflr Pr  vs.  KBC Ancora SCA

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.

KBC Ancora SCA

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KBC Ancora SCA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, KBC Ancora is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Armada Hflr and KBC Ancora

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

The idea behind Armada Hflr Pr and KBC Ancora SCA 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.