Correlation Between Armada Hflr and GrafTech International
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and GrafTech International 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 GrafTech International 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 GrafTech International, you can compare the effects of market volatilities on Armada Hflr and GrafTech International 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 GrafTech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and GrafTech International.
Diversification Opportunities for Armada Hflr and GrafTech International
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Armada and GrafTech is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and GrafTech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrafTech International 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 GrafTech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrafTech International has no effect on the direction of Armada Hflr i.e., Armada Hflr and GrafTech International go up and down completely randomly.
Pair Corralation between Armada Hflr and GrafTech International
Considering the 90-day investment horizon Armada Hflr Pr is expected to generate 0.23 times more return on investment than GrafTech International. However, Armada Hflr Pr is 4.39 times less risky than GrafTech International. It trades about -0.28 of its potential returns per unit of risk. GrafTech International is currently generating about -0.21 per unit of risk. If you would invest 1,100 in Armada Hflr Pr on September 24, 2024 and sell it today you would lose (78.50) from holding Armada Hflr Pr or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Armada Hflr Pr vs. GrafTech International
Performance |
| Timeline |
| Armada Hflr Pr |
| GrafTech International |
Armada Hflr and GrafTech International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and GrafTech International
The main advantage of trading using opposite Armada Hflr and GrafTech International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, GrafTech International 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 GrafTech International will offset losses from the drop in GrafTech International'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 |
| GrafTech International vs. Evolution Mining Limited | GrafTech International vs. American Airlines Group | GrafTech International vs. Clean Energy Fuels | GrafTech International vs. ALERION CLEANPOWER |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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