Correlation Between Armada Hflr and RTL GROUP
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and RTL GROUP 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 RTL GROUP 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 RTL GROUP UNSPADR, you can compare the effects of market volatilities on Armada Hflr and RTL GROUP 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 RTL GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and RTL GROUP.
Diversification Opportunities for Armada Hflr and RTL GROUP
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Armada and RTL is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and RTL GROUP UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTL GROUP UNSPADR 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 RTL GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTL GROUP UNSPADR has no effect on the direction of Armada Hflr i.e., Armada Hflr and RTL GROUP go up and down completely randomly.
Pair Corralation between Armada Hflr and RTL GROUP
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the RTL GROUP. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.77 times less risky than RTL GROUP. The stock trades about -0.15 of its potential returns per unit of risk. The RTL GROUP UNSPADR is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 290.00 in RTL GROUP UNSPADR on September 24, 2024 and sell it today you would lose (44.00) from holding RTL GROUP UNSPADR or give up 15.17% 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. RTL GROUP UNSPADR
Performance |
Timeline |
Armada Hflr Pr |
RTL GROUP UNSPADR |
Armada Hflr and RTL GROUP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Armada Hflr and RTL GROUP
The main advantage of trading using opposite Armada Hflr and RTL GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, RTL GROUP 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 RTL GROUP will offset losses from the drop in RTL GROUP'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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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