Correlation Between Armada Hflr and Sleep Cycle
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Sleep Cycle 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 Sleep Cycle 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 Sleep Cycle AB, you can compare the effects of market volatilities on Armada Hflr and Sleep Cycle 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 Sleep Cycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Sleep Cycle.
Diversification Opportunities for Armada Hflr and Sleep Cycle
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Armada and Sleep is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Sleep Cycle AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sleep Cycle AB 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 Sleep Cycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sleep Cycle AB has no effect on the direction of Armada Hflr i.e., Armada Hflr and Sleep Cycle go up and down completely randomly.
Pair Corralation between Armada Hflr and Sleep Cycle
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Sleep Cycle. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.64 times less risky than Sleep Cycle. The stock trades about -0.03 of its potential returns per unit of risk. The Sleep Cycle AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,620 in Sleep Cycle AB on October 13, 2024 and sell it today you would earn a total of 220.00 from holding Sleep Cycle AB or generate 6.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Armada Hflr Pr vs. Sleep Cycle AB
Performance |
| Timeline |
| Armada Hflr Pr |
| Sleep Cycle AB |
Armada Hflr and Sleep Cycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and Sleep Cycle
The main advantage of trading using opposite Armada Hflr and Sleep Cycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Sleep Cycle 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 Sleep Cycle will offset losses from the drop in Sleep Cycle'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 |
| Sleep Cycle vs. FormPipe Software AB | Sleep Cycle vs. Cint Group AB | Sleep Cycle vs. Lime Technologies AB | Sleep Cycle vs. Micro Systemation 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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