Correlation Between Armada Hflr and Assured Guaranty
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Assured Guaranty 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 Assured Guaranty 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 Assured Guaranty, you can compare the effects of market volatilities on Armada Hflr and Assured Guaranty 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 Assured Guaranty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Assured Guaranty.
Diversification Opportunities for Armada Hflr and Assured Guaranty
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Armada and Assured is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Assured Guaranty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assured Guaranty 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 Assured Guaranty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assured Guaranty has no effect on the direction of Armada Hflr i.e., Armada Hflr and Assured Guaranty go up and down completely randomly.
Pair Corralation between Armada Hflr and Assured Guaranty
Considering the 90-day investment horizon Armada Hflr is expected to generate 39.18 times less return on investment than Assured Guaranty. But when comparing it to its historical volatility, Armada Hflr Pr is 1.79 times less risky than Assured Guaranty. It trades about 0.0 of its potential returns per unit of risk. Assured Guaranty is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,299 in Assured Guaranty on October 7, 2024 and sell it today you would earn a total of 3,001 from holding Assured Guaranty or generate 56.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Armada Hflr Pr vs. Assured Guaranty
Performance |
| Timeline |
| Armada Hflr Pr |
| Assured Guaranty |
Armada Hflr and Assured Guaranty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and Assured Guaranty
The main advantage of trading using opposite Armada Hflr and Assured Guaranty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Assured Guaranty 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 Assured Guaranty will offset losses from the drop in Assured Guaranty's long position.| Armada Hflr vs. Modiv Inc | Armada Hflr vs. NexPoint Diversified Real | Armada Hflr vs. Essential Properties Realty | Armada Hflr vs. Broadstone Net Lease |
| Assured Guaranty vs. Delta Air Lines | Assured Guaranty vs. FAIR ISAAC | Assured Guaranty vs. ADRIATIC METALS LS 013355 | Assured Guaranty vs. MAGNUM MINING EXP |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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