Correlation Between Armada Hflr and Hays PLC
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Hays PLC 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 Hays PLC 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 Hays PLC ADR, you can compare the effects of market volatilities on Armada Hflr and Hays PLC 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 Hays PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Hays PLC.
Diversification Opportunities for Armada Hflr and Hays PLC
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Armada and Hays is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Hays PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hays PLC ADR 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 Hays PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hays PLC ADR has no effect on the direction of Armada Hflr i.e., Armada Hflr and Hays PLC go up and down completely randomly.
Pair Corralation between Armada Hflr and Hays PLC
Considering the 90-day investment horizon Armada Hflr Pr is expected to generate 0.89 times more return on investment than Hays PLC. However, Armada Hflr Pr is 1.13 times less risky than Hays PLC. It trades about 0.03 of its potential returns per unit of risk. Hays PLC ADR is currently generating about -0.02 per unit of risk. If you would invest 1,003 in Armada Hflr Pr on September 14, 2024 and sell it today you would earn a total of 87.50 from holding Armada Hflr Pr or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 63.94% |
| Values | Daily Returns |
Armada Hflr Pr vs. Hays PLC ADR
Performance |
| Timeline |
| Armada Hflr Pr |
| Hays PLC ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Armada Hflr and Hays PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and Hays PLC
The main advantage of trading using opposite Armada Hflr and Hays PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Hays PLC 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 Hays PLC will offset losses from the drop in Hays PLC'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 |
| Hays PLC vs. Randstad Holdings NV | Hays PLC vs. Kforce Inc | Hays PLC vs. Recruit Holdings Co | Hays PLC vs. Kelly Services A |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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