Correlation Between AGBAW Old and Armada Mercantile
Can any of the company-specific risk be diversified away by investing in both AGBAW Old and Armada Mercantile 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 AGBAW Old and Armada Mercantile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGBAW Old and Armada Mercantile, you can compare the effects of market volatilities on AGBAW Old and Armada Mercantile 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 AGBAW Old with a short position of Armada Mercantile. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGBAW Old and Armada Mercantile.
Diversification Opportunities for AGBAW Old and Armada Mercantile
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between AGBAW and Armada is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding AGBAW Old and Armada Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Mercantile and AGBAW Old 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 AGBAW Old are associated (or correlated) with Armada Mercantile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Mercantile has no effect on the direction of AGBAW Old i.e., AGBAW Old and Armada Mercantile go up and down completely randomly.
Pair Corralation between AGBAW Old and Armada Mercantile
Assuming the 90 days horizon AGBAW Old is expected to generate 9.47 times more return on investment than Armada Mercantile. However, AGBAW Old is 9.47 times more volatile than Armada Mercantile. It trades about 0.11 of its potential returns per unit of risk. Armada Mercantile is currently generating about 0.03 per unit of risk. If you would invest 4.37 in AGBAW Old on October 21, 2024 and sell it today you would earn a total of 16.63 from holding AGBAW Old or generate 380.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 66.27% |
| Values | Daily Returns |
AGBAW Old vs. Armada Mercantile
Performance |
| Timeline |
| AGBAW Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Armada Mercantile |
AGBAW Old and Armada Mercantile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGBAW Old and Armada Mercantile
The main advantage of trading using opposite AGBAW Old and Armada Mercantile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGBAW Old position performs unexpectedly, Armada Mercantile 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 Armada Mercantile will offset losses from the drop in Armada Mercantile's long position.The idea behind AGBAW Old and Armada Mercantile 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.| Armada Mercantile vs. Dmg Blockchain Solutions | Armada Mercantile vs. Arcane Crypto AB | Armada Mercantile vs. Cypherpunk Holdings | Armada Mercantile vs. Bluesky Digital Assets |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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