Correlation Between Armada Hflr and Wam Capital
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Wam Capital 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 Wam Capital 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 Wam Capital, you can compare the effects of market volatilities on Armada Hflr and Wam Capital 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 Wam Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Wam Capital.
Diversification Opportunities for Armada Hflr and Wam Capital
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Armada and Wam is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Wam Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wam Capital 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 Wam Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wam Capital has no effect on the direction of Armada Hflr i.e., Armada Hflr and Wam Capital go up and down completely randomly.
Pair Corralation between Armada Hflr and Wam Capital
Considering the 90-day investment horizon Armada Hflr is expected to generate 1.17 times less return on investment than Wam Capital. In addition to that, Armada Hflr is 1.42 times more volatile than Wam Capital. It trades about 0.02 of its total potential returns per unit of risk. Wam Capital is currently generating about 0.03 per unit of volatility. If you would invest 134.00 in Wam Capital on September 13, 2024 and sell it today you would earn a total of 19.00 from holding Wam Capital or generate 14.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Armada Hflr Pr vs. Wam Capital
Performance |
| Timeline |
| Armada Hflr Pr |
| Wam Capital |
Armada Hflr and Wam Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and Wam Capital
The main advantage of trading using opposite Armada Hflr and Wam Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Wam Capital 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 Wam Capital will offset losses from the drop in Wam Capital'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 |
| Wam Capital vs. Australian Strategic Materials | Wam Capital vs. Stelar Metals | Wam Capital vs. Collins Foods | Wam Capital vs. Beston Global Food |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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