Correlation Between Armada Hflr and FNB ETN

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

Diversification Opportunities for Armada Hflr and FNB ETN

-0.38

Correlation Coefficient

Armada Hflr  FNB ETN

Very good diversification

The 3 months correlation between Armada and FNB is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and FNB ETN on in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB ETN on 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 FNB ETN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB ETN on has no effect on the direction of Armada Hflr i.e., Armada Hflr and FNB ETN go up and down completely randomly.

Pair Corralation between Armada Hflr and FNB ETN

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the FNB ETN. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.06 times less risky than FNB ETN. The stock trades about -0.08 of its potential returns per unit of risk. The FNB ETN on is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  209,200  in FNB ETN on on September 14, 2024 and sell it today you would earn a total of  10,600  from holding FNB ETN on or generate 5.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.13%
Values	Daily Returns

Armada Hflr Pr  vs.  FNB ETN on

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 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.

FNB ETN on

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FNB ETN on are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, FNB ETN may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Armada Hflr and FNB ETN

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

The idea behind Armada Hflr Pr and FNB ETN on 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.