Correlation Between Armada Hflr and Ratos AB
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Ratos AB 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 Ratos AB 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 Ratos AB, you can compare the effects of market volatilities on Armada Hflr and Ratos AB 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 Ratos AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Ratos AB.
Diversification Opportunities for Armada Hflr and Ratos AB
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Armada and Ratos is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Ratos AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratos AB 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 Ratos AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratos AB has no effect on the direction of Armada Hflr i.e., Armada Hflr and Ratos AB go up and down completely randomly.
Pair Corralation between Armada Hflr and Ratos AB
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Ratos AB. In addition to that, Armada Hflr is 1.12 times more volatile than Ratos AB. It trades about -0.08 of its total potential returns per unit of risk. Ratos AB is currently generating about -0.08 per unit of volatility. If you would invest 3,442 in Ratos AB on September 15, 2024 and sell it today you would lose (262.00) from holding Ratos AB or give up 7.61% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.46% |
Values | Daily Returns |
Armada Hflr Pr vs. Ratos AB
Performance |
Timeline |
Armada Hflr Pr |
Ratos AB |
Armada Hflr and Ratos AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Armada Hflr and Ratos AB
The main advantage of trading using opposite Armada Hflr and Ratos AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Ratos AB 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 Ratos AB will offset losses from the drop in Ratos AB's long position.Armada Hflr vs. Modiv Inc | Armada Hflr vs. Precinct Properties New | Armada Hflr vs. Global Net Lease | Armada Hflr vs. NexPoint Diversified Real |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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