Correlation Between Armada Hflr and Alset Ehome
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Alset Ehome 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 Alset Ehome 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 Alset Ehome International, you can compare the effects of market volatilities on Armada Hflr and Alset Ehome 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 Alset Ehome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Alset Ehome.
Diversification Opportunities for Armada Hflr and Alset Ehome
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Armada and Alset is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Alset Ehome International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alset Ehome International 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 Alset Ehome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alset Ehome International has no effect on the direction of Armada Hflr i.e., Armada Hflr and Alset Ehome go up and down completely randomly.
Pair Corralation between Armada Hflr and Alset Ehome
Considering the 90-day investment horizon Armada Hflr is expected to generate 3.77 times less return on investment than Alset Ehome. But when comparing it to its historical volatility, Armada Hflr Pr is 5.39 times less risky than Alset Ehome. It trades about 0.06 of its potential returns per unit of risk. Alset Ehome International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 103.00 in Alset Ehome International on August 27, 2024 and sell it today you would earn a total of 5.00 from holding Alset Ehome International or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Armada Hflr Pr vs. Alset Ehome International
Performance |
| Timeline |
| Armada Hflr Pr |
| Alset Ehome International |
Armada Hflr and Alset Ehome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and Alset Ehome
The main advantage of trading using opposite Armada Hflr and Alset Ehome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Alset Ehome 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 Alset Ehome will offset losses from the drop in Alset Ehome'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 |
| Alset Ehome vs. Investcorp Credit Management | Alset Ehome vs. Medalist Diversified Reit | Alset Ehome vs. Aquagold International | Alset Ehome vs. Morningstar Unconstrained Allocation |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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