Correlation Between Armada Hflr and Safehold
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Safehold 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 Safehold 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 Safehold, you can compare the effects of market volatilities on Armada Hflr and Safehold 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 Safehold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Safehold.
Diversification Opportunities for Armada Hflr and Safehold
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Armada and Safehold is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Safehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safehold 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 Safehold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safehold has no effect on the direction of Armada Hflr i.e., Armada Hflr and Safehold go up and down completely randomly.
Pair Corralation between Armada Hflr and Safehold
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Safehold. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.66 times less risky than Safehold. The stock trades about -0.22 of its potential returns per unit of risk. The Safehold is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 2,044 in Safehold on November 26, 2024 and sell it today you would lose (338.00) from holding Safehold or give up 16.54% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Armada Hflr Pr vs. Safehold
Performance |
Timeline |
Armada Hflr Pr |
Safehold |
Armada Hflr and Safehold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Armada Hflr and Safehold
The main advantage of trading using opposite Armada Hflr and Safehold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Safehold 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 Safehold will offset losses from the drop in Safehold's long position.Armada Hflr vs. Modiv Inc | ||
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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