Correlation Between Armada Hflr and 70GD
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and 70GD 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 70GD 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 70GD, you can compare the effects of market volatilities on Armada Hflr and 70GD 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 70GD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and 70GD.
Diversification Opportunities for Armada Hflr and 70GD
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Armada and 70GD is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and 70GD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 70GD 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 70GD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 70GD has no effect on the direction of Armada Hflr i.e., Armada Hflr and 70GD go up and down completely randomly.
Pair Corralation between Armada Hflr and 70GD
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the 70GD. In addition to that, Armada Hflr is 1.26 times more volatile than 70GD. It trades about -0.28 of its total potential returns per unit of risk. 70GD is currently generating about 0.22 per unit of volatility. If you would invest 68.00 in 70GD on September 24, 2024 and sell it today you would earn a total of 3.00 from holding 70GD or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Armada Hflr Pr vs. 70GD
Performance |
| Timeline |
| Armada Hflr Pr |
| 70GD |
Armada Hflr and 70GD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and 70GD
The main advantage of trading using opposite Armada Hflr and 70GD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, 70GD 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 70GD will offset losses from the drop in 70GD's long position.| Armada Hflr vs. Modiv Inc | Armada Hflr vs. Precinct Properties New | Armada Hflr vs. Global Net Lease | Armada Hflr vs. NexPoint Diversified Real |
| 70GD vs. Ryanair Holdings plc | 70GD vs. CVS Health Corp | 70GD vs. Norwegian Air Shuttle | 70GD vs. Air Products Chemicals |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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