Correlation Between Armada Hflr and Amana Income
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Amana Income 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 Amana Income 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 Amana Income Fund, you can compare the effects of market volatilities on Armada Hflr and Amana Income 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 Amana Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Amana Income.
Diversification Opportunities for Armada Hflr and Amana Income
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Armada and Amana is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Amana Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amana Income 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 Amana Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amana Income has no effect on the direction of Armada Hflr i.e., Armada Hflr and Amana Income go up and down completely randomly.
Pair Corralation between Armada Hflr and Amana Income
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Amana Income. In addition to that, Armada Hflr is 2.62 times more volatile than Amana Income Fund. It trades about -0.09 of its total potential returns per unit of risk. Amana Income Fund is currently generating about 0.05 per unit of volatility. If you would invest 6,372 in Amana Income Fund on October 21, 2024 and sell it today you would earn a total of 32.00 from holding Amana Income Fund or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Armada Hflr Pr vs. Amana Income Fund
Performance |
| Timeline |
| Armada Hflr Pr |
| Amana Income |
Armada Hflr and Amana Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and Amana Income
The main advantage of trading using opposite Armada Hflr and Amana Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Amana Income 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 Amana Income will offset losses from the drop in Amana Income'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 |
| Amana Income vs. Amana Growth Fund | Amana Income vs. Amana Developing World | Amana Income vs. Amana Developing World | Amana Income vs. Amana Income Fund |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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