Correlation Between Armada Hflr and Standard Lithium
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Standard Lithium 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 Standard Lithium 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 Standard Lithium, you can compare the effects of market volatilities on Armada Hflr and Standard Lithium 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 Standard Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Standard Lithium.
Diversification Opportunities for Armada Hflr and Standard Lithium
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Armada and Standard is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Standard Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Lithium 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 Standard Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Lithium has no effect on the direction of Armada Hflr i.e., Armada Hflr and Standard Lithium go up and down completely randomly.
Pair Corralation between Armada Hflr and Standard Lithium
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Standard Lithium. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 3.46 times less risky than Standard Lithium. The stock trades about -0.01 of its potential returns per unit of risk. The Standard Lithium is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 172.00 in Standard Lithium on September 12, 2024 and sell it today you would lose (13.00) from holding Standard Lithium or give up 7.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Armada Hflr Pr vs. Standard Lithium
Performance |
| Timeline |
| Armada Hflr Pr |
| Standard Lithium |
Armada Hflr and Standard Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and Standard Lithium
The main advantage of trading using opposite Armada Hflr and Standard Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Standard Lithium 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 Standard Lithium will offset losses from the drop in Standard Lithium'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 |
| Standard Lithium vs. BHP Group Limited | Standard Lithium vs. Vale SA | Standard Lithium vs. Superior Plus Corp | Standard Lithium vs. SIVERS SEMICONDUCTORS AB |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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