Correlation Between Armada Hflr and Nasdaq CTA

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Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Nasdaq CTA 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 Nasdaq CTA 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 Nasdaq CTA Artificial, you can compare the effects of market volatilities on Armada Hflr and Nasdaq CTA 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 Nasdaq CTA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Nasdaq CTA.

Diversification Opportunities for Armada Hflr and Nasdaq CTA

-0.39

Correlation Coefficient

Armada Hflr

Nasdaq CTA

Very good diversification

The 3 months correlation between Armada and Nasdaq is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Nasdaq CTA Artificial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq CTA Artificial 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 Nasdaq CTA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq CTA Artificial has no effect on the direction of Armada Hflr i.e., Armada Hflr and Nasdaq CTA go up and down completely randomly.

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Pair Corralation between Armada Hflr and Nasdaq CTA

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Nasdaq CTA. In addition to that, Armada Hflr is 1.54 times more volatile than Nasdaq CTA Artificial. It trades about -0.21 of its total potential returns per unit of risk. Nasdaq CTA Artificial is currently generating about 0.25 per unit of volatility. If you would invest 157,228 in Nasdaq CTA Artificial on September 19, 2024 and sell it today you would earn a total of 9,049 from holding Nasdaq CTA Artificial or generate 5.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Armada Hflr Pr vs. Nasdaq CTA Artificial

Performance

Timeline

Armada Hflr and Nasdaq CTA Volatility Contrast

Predicted Return Density

Returns

Armada Hflr Pr

Pair trading matchups for Armada Hflr

	Armada Hflr vs. Modiv Inc
	Armada Hflr vs. Precinct Properties New
	Armada Hflr vs. Global Net Lease
	Armada Hflr vs. NexPoint Diversified Real

Nasdaq CTA Artificial

Pair trading matchups for Nasdaq CTA

	Nasdaq CTA vs. Global E Online
	Nasdaq CTA vs. Addus HomeCare
	Nasdaq CTA vs. Boston Omaha Corp
	Nasdaq CTA vs. Hooker Furniture

Pair Trading with Armada Hflr and Nasdaq CTA

The main advantage of trading using opposite Armada Hflr and Nasdaq CTA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Nasdaq CTA 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 Nasdaq CTA will offset losses from the drop in Nasdaq CTA'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

The idea behind Armada Hflr Pr and Nasdaq CTA Artificial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

	Nasdaq CTA vs. Global E Online
	Nasdaq CTA vs. Addus HomeCare
	Nasdaq CTA vs. Boston Omaha Corp
	Nasdaq CTA vs. Hooker Furniture

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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