Correlation Between Armada Hflr and Freeport McMoRan
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Freeport McMoRan 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 Freeport McMoRan 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 Freeport McMoRan, you can compare the effects of market volatilities on Armada Hflr and Freeport McMoRan 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 Freeport McMoRan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Freeport McMoRan.
Diversification Opportunities for Armada Hflr and Freeport McMoRan
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Armada and Freeport is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Freeport McMoRan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freeport McMoRan 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 Freeport McMoRan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freeport McMoRan has no effect on the direction of Armada Hflr i.e., Armada Hflr and Freeport McMoRan go up and down completely randomly.
Pair Corralation between Armada Hflr and Freeport McMoRan
Considering the 90-day investment horizon Armada Hflr is expected to generate 2.09 times less return on investment than Freeport McMoRan. But when comparing it to its historical volatility, Armada Hflr Pr is 1.41 times less risky than Freeport McMoRan. It trades about 0.02 of its potential returns per unit of risk. Freeport McMoRan is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,458 in Freeport McMoRan on September 13, 2024 and sell it today you would earn a total of 634.00 from holding Freeport McMoRan or generate 18.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.02% |
| Values | Daily Returns |
Armada Hflr Pr vs. Freeport McMoRan
Performance |
| Timeline |
| Armada Hflr Pr |
| Freeport McMoRan |
Armada Hflr and Freeport McMoRan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and Freeport McMoRan
The main advantage of trading using opposite Armada Hflr and Freeport McMoRan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Freeport McMoRan 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 Freeport McMoRan will offset losses from the drop in Freeport McMoRan'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 |
| Freeport McMoRan vs. Southern Copper | Freeport McMoRan vs. Sandfire Resources Limited | Freeport McMoRan vs. Superior Plus Corp | Freeport McMoRan vs. NMI Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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