Correlation Between Armada Hflr and NorthView Acquisition

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

Diversification Opportunities for Armada Hflr and NorthView Acquisition

0.02

Correlation Coefficient

Armada Hflr  NorthView Acquisition

Significant diversification

The 3 months correlation between Armada and NorthView is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and NorthView Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorthView Acquisition 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 NorthView Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorthView Acquisition has no effect on the direction of Armada Hflr i.e., Armada Hflr and NorthView Acquisition go up and down completely randomly.

Pair Corralation between Armada Hflr and NorthView Acquisition

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the NorthView Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 166.17 times less risky than NorthView Acquisition. The stock trades about -0.02 of its potential returns per unit of risk. The NorthView Acquisition is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  11.00  in NorthView Acquisition on September 29, 2024 and sell it today you would lose (9.70) from holding NorthView Acquisition or give up 88.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	65.87%
Values	Daily Returns

Armada Hflr Pr  vs.  NorthView Acquisition

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 fairly strong technical indicators, Armada Hflr is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

NorthView Acquisition

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days NorthView Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Armada Hflr and NorthView Acquisition

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

The idea behind Armada Hflr Pr and NorthView Acquisition 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.