Correlation Between Armada Hflr and Guggenheim Small
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Guggenheim Small 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 Guggenheim Small 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 Guggenheim Small Cap, you can compare the effects of market volatilities on Armada Hflr and Guggenheim Small 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 Guggenheim Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Guggenheim Small.
Diversification Opportunities for Armada Hflr and Guggenheim Small
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Armada and Guggenheim is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Guggenheim Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Small Cap 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 Guggenheim Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Small Cap has no effect on the direction of Armada Hflr i.e., Armada Hflr and Guggenheim Small go up and down completely randomly.
Pair Corralation between Armada Hflr and Guggenheim Small
Considering the 90-day investment horizon Armada Hflr is expected to generate 1.28 times less return on investment than Guggenheim Small. In addition to that, Armada Hflr is 1.55 times more volatile than Guggenheim Small Cap. It trades about 0.03 of its total potential returns per unit of risk. Guggenheim Small Cap is currently generating about 0.06 per unit of volatility. If you would invest 1,403 in Guggenheim Small Cap on September 14, 2024 and sell it today you would earn a total of 171.00 from holding Guggenheim Small Cap or generate 12.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 86.25% |
| Values | Daily Returns |
Armada Hflr Pr vs. Guggenheim Small Cap
Performance |
| Timeline |
| Armada Hflr Pr |
| Guggenheim Small Cap |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Armada Hflr and Guggenheim Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and Guggenheim Small
The main advantage of trading using opposite Armada Hflr and Guggenheim Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Guggenheim Small 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 Guggenheim Small will offset losses from the drop in Guggenheim Small'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 |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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