Correlation Between Armada Hflr and Mars Acquisition

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

Diversification Opportunities for Armada Hflr and Mars Acquisition

-0.49

Correlation Coefficient

Armada Hflr  Mars Acquisition

Very good diversification

The 3 months correlation between Armada and Mars is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Mars Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mars Acquisition Corp 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 Mars Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mars Acquisition Corp has no effect on the direction of Armada Hflr i.e., Armada Hflr and Mars Acquisition go up and down completely randomly.

Pair Corralation between Armada Hflr and Mars Acquisition

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Mars Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 10.24 times less risky than Mars Acquisition. The stock trades about -0.09 of its potential returns per unit of risk. The Mars Acquisition Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  25.00  in Mars Acquisition Corp on September 28, 2024 and sell it today you would earn a total of  13.00  from holding Mars Acquisition Corp or generate 52.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	46.77%
Values	Daily Returns

Armada Hflr Pr  vs.  Mars Acquisition Corp

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 latest unfluctuating 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.

Mars Acquisition Corp

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Mars Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively abnormal basic indicators, Mars Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Armada Hflr and Mars Acquisition

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

The idea behind Armada Hflr Pr and Mars Acquisition Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.