Correlation Between Armada Hflr and Kerur Holdings

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

Diversification Opportunities for Armada Hflr and Kerur Holdings

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between Armada and Kerur is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Kerur Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerur Holdings 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 Kerur Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerur Holdings has no effect on the direction of Armada Hflr i.e., Armada Hflr and Kerur Holdings go up and down completely randomly.

Pair Corralation between Armada Hflr and Kerur Holdings

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Kerur Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.22 times less risky than Kerur Holdings. The stock trades about -0.08 of its potential returns per unit of risk. The Kerur Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  689,500  in Kerur Holdings on September 15, 2024 and sell it today you would earn a total of  108,900  from holding Kerur Holdings or generate 15.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy73.44%
ValuesDaily Returns

Armada Hflr Pr  vs.  Kerur Holdings

 Performance 
       Timeline  
Armada Hflr Pr 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Kerur Holdings 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Kerur Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kerur Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Armada Hflr and Kerur Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Armada Hflr and Kerur Holdings

The main advantage of trading using opposite Armada Hflr and Kerur Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Kerur Holdings 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 Kerur Holdings will offset losses from the drop in Kerur Holdings' long position.
The idea behind Armada Hflr Pr and Kerur Holdings 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 Global Correlations module to find global opportunities by holding instruments from different markets.

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