Correlation Between Armada Hflr and FIRST TRUST
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and FIRST TRUST 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 FIRST TRUST 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 FIRST TRUST GLOBAL, you can compare the effects of market volatilities on Armada Hflr and FIRST TRUST 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 FIRST TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and FIRST TRUST.
Diversification Opportunities for Armada Hflr and FIRST TRUST
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Armada and FIRST is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and FIRST TRUST GLOBAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST TRUST GLOBAL 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 FIRST TRUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST TRUST GLOBAL has no effect on the direction of Armada Hflr i.e., Armada Hflr and FIRST TRUST go up and down completely randomly.
Pair Corralation between Armada Hflr and FIRST TRUST
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the FIRST TRUST. In addition to that, Armada Hflr is 2.48 times more volatile than FIRST TRUST GLOBAL. It trades about -0.03 of its total potential returns per unit of risk. FIRST TRUST GLOBAL is currently generating about 0.08 per unit of volatility. If you would invest 3,567 in FIRST TRUST GLOBAL on September 20, 2024 and sell it today you would earn a total of 425.00 from holding FIRST TRUST GLOBAL or generate 11.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Armada Hflr Pr vs. FIRST TRUST GLOBAL
Performance |
| Timeline |
| Armada Hflr Pr |
| FIRST TRUST GLOBAL |
Armada Hflr and FIRST TRUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and FIRST TRUST
The main advantage of trading using opposite Armada Hflr and FIRST TRUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, FIRST TRUST 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 FIRST TRUST will offset losses from the drop in FIRST TRUST'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 |
| FIRST TRUST vs. GraniteShares 3x Short | FIRST TRUST vs. WisdomTree Natural Gas | FIRST TRUST vs. Leverage Shares 3x | FIRST TRUST vs. WisdomTree Natural Gas |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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