Correlation Between Armada Hflr and High Yield

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

Diversification Opportunities for Armada Hflr and High Yield

-0.06

Correlation Coefficient

Armada Hflr  High Yield

Good diversification

The 3 months correlation between Armada and High is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Armada Hflr i.e., Armada Hflr and High Yield go up and down completely randomly.

Pair Corralation between Armada Hflr and High Yield

Considering the 90-day investment horizon Armada Hflr is expected to generate 2.4 times less return on investment than High Yield. In addition to that, Armada Hflr is 6.01 times more volatile than High Yield Fund. It trades about 0.01 of its total potential returns per unit of risk. High Yield Fund is currently generating about 0.14 per unit of volatility. If you would invest  627.00  in High Yield Fund on September 20, 2024 and sell it today you would earn a total of  124.00  from holding High Yield Fund or generate 19.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Armada Hflr Pr  vs.  High Yield Fund

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 latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

High Yield Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days High Yield Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, High Yield is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and High Yield

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

The idea behind Armada Hflr Pr and High Yield Fund 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.