Correlation Between Armada Hflr and College Retirement

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

Diversification Opportunities for Armada Hflr and College Retirement

-0.42

Correlation Coefficient

Armada Hflr  College Retirement

Very good diversification

The 3 months correlation between Armada and College is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and College Retirement Equities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on College Retirement 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 College Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of College Retirement has no effect on the direction of Armada Hflr i.e., Armada Hflr and College Retirement go up and down completely randomly.

Pair Corralation between Armada Hflr and College Retirement

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the College Retirement. In addition to that, Armada Hflr is 2.2 times more volatile than College Retirement Equities. It trades about -0.07 of its total potential returns per unit of risk. College Retirement Equities is currently generating about 0.21 per unit of volatility. If you would invest  47,997  in College Retirement Equities on September 13, 2024 and sell it today you would earn a total of  4,403  from holding College Retirement Equities or generate 9.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Armada Hflr Pr  vs.  College Retirement Equities

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 current stock price confusion, may contribute to short-horizon losses for the traders.

College Retirement

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in College Retirement Equities are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, College Retirement may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Armada Hflr and College Retirement

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

The idea behind Armada Hflr Pr and College Retirement Equities 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.