Correlation Between Armada Hflr and Security Federal

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

Diversification Opportunities for Armada Hflr and Security Federal

0.08

Correlation Coefficient

Armada Hflr  Security Federal

Significant diversification

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

Pair Corralation between Armada Hflr and Security Federal

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Security Federal. In addition to that, Armada Hflr is 1.52 times more volatile than Security Federal. It trades about -0.02 of its total potential returns per unit of risk. Security Federal is currently generating about 0.13 per unit of volatility. If you would invest  2,320  in Security Federal on September 26, 2024 and sell it today you would earn a total of  380.00  from holding Security Federal or generate 16.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Armada Hflr Pr  vs.  Security Federal

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.

Security Federal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Security Federal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Security Federal is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Armada Hflr and Security Federal

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

The idea behind Armada Hflr Pr and Security Federal 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.