Correlation Between Armada Hflr and 670346AU9

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and 670346AU9 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 670346AU9 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 NUE 2979 15 DEC 55, you can compare the effects of market volatilities on Armada Hflr and 670346AU9 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 670346AU9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and 670346AU9.

Diversification Opportunities for Armada Hflr and 670346AU9

0.1

Correlation Coefficient

Armada Hflr  670346AU9

Average diversification

The 3 months correlation between Armada and 670346AU9 is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and NUE 2979 15 DEC 55 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NUE 2979 15 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 670346AU9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NUE 2979 15 has no effect on the direction of Armada Hflr i.e., Armada Hflr and 670346AU9 go up and down completely randomly.

Pair Corralation between Armada Hflr and 670346AU9

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the 670346AU9. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 2.67 times less risky than 670346AU9. The stock trades about -0.27 of its potential returns per unit of risk. The NUE 2979 15 DEC 55 is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  6,303  in NUE 2979 15 DEC 55 on September 24, 2024 and sell it today you would earn a total of  636.00  from holding NUE 2979 15 DEC 55 or generate 10.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	75.0%
Values	Daily Returns

Armada Hflr Pr  vs.  NUE 2979 15 DEC 55

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 weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

NUE 2979 15

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NUE 2979 15 DEC 55 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, 670346AU9 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Armada Hflr and 670346AU9

The main advantage of trading using opposite Armada Hflr and 670346AU9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, 670346AU9 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 670346AU9 will offset losses from the drop in 670346AU9's long position.

The idea behind Armada Hflr Pr and NUE 2979 15 DEC 55 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.