Correlation Between Armada Hflr and Amg Frontier

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

Diversification Opportunities for Armada Hflr and Amg Frontier

-0.08

Correlation Coefficient

Armada Hflr  Amg Frontier

Good diversification

The 3 months correlation between Armada and Amg is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Amg Frontier Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Frontier Small 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 Amg Frontier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Frontier Small has no effect on the direction of Armada Hflr i.e., Armada Hflr and Amg Frontier go up and down completely randomly.

Pair Corralation between Armada Hflr and Amg Frontier

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Amg Frontier. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.12 times less risky than Amg Frontier. The stock trades about -0.12 of its potential returns per unit of risk. The Amg Frontier Small is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  861.00  in Amg Frontier Small on September 20, 2024 and sell it today you would lose (69.00) from holding Amg Frontier Small or give up 8.01% of portfolio value over 90 days.

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

Armada Hflr Pr  vs.  Amg Frontier Small

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.

Amg Frontier Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amg Frontier Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Armada Hflr and Amg Frontier

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

The idea behind Armada Hflr Pr and Amg Frontier Small 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.