Correlation Between Armada Hflr and CSIF I

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

Diversification Opportunities for Armada Hflr and CSIF I

-0.6
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Armada and CSIF is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and CSIF I Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSIF I Real 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 CSIF I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSIF I Real has no effect on the direction of Armada Hflr i.e., Armada Hflr and CSIF I go up and down completely randomly.

Pair Corralation between Armada Hflr and CSIF I

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the CSIF I. In addition to that, Armada Hflr is 2.02 times more volatile than CSIF I Real. It trades about -0.15 of its total potential returns per unit of risk. CSIF I Real is currently generating about 0.31 per unit of volatility. If you would invest  187,744  in CSIF I Real on September 25, 2024 and sell it today you would earn a total of  13,885  from holding CSIF I Real or generate 7.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy97.62%
ValuesDaily Returns

Armada Hflr Pr  vs.  CSIF I Real

 Performance 
       Timeline  
Armada Hflr Pr 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
CSIF I Real 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in CSIF I Real are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly unsteady technical and fundamental indicators, CSIF I may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Armada Hflr and CSIF I Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Armada Hflr and CSIF I

The main advantage of trading using opposite Armada Hflr and CSIF I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, CSIF I 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 CSIF I will offset losses from the drop in CSIF I's long position.
The idea behind Armada Hflr Pr and CSIF I Real 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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