Correlation Between Armada Hflr and Build A
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Build A 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 Build A 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 Build A Bear Workshop, you can compare the effects of market volatilities on Armada Hflr and Build A 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 Build A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Build A.
Diversification Opportunities for Armada Hflr and Build A
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Armada and Build is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Build A Bear Workshop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Build A Bear 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 Build A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Build A Bear has no effect on the direction of Armada Hflr i.e., Armada Hflr and Build A go up and down completely randomly.
Pair Corralation between Armada Hflr and Build A
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Build A. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 7.54 times less risky than Build A. The stock trades about -0.13 of its potential returns per unit of risk. The Build A Bear Workshop is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,689 in Build A Bear Workshop on September 18, 2024 and sell it today you would earn a total of 680.50 from holding Build A Bear Workshop or generate 18.45% 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. Build A Bear Workshop
Performance |
| Timeline |
| Armada Hflr Pr |
| Build A Bear |
Armada Hflr and Build A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and Build A
The main advantage of trading using opposite Armada Hflr and Build A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Build A 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 Build A will offset losses from the drop in Build A's long position.The idea behind Armada Hflr Pr and Build A Bear Workshop 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.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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |