Correlation Between Armada Hflr and ETC On
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and ETC On 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 ETC On 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 ETC on CMCI, you can compare the effects of market volatilities on Armada Hflr and ETC On 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 ETC On. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and ETC On.
Diversification Opportunities for Armada Hflr and ETC On
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Armada and ETC is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and ETC on CMCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETC on CMCI 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 ETC On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETC on CMCI has no effect on the direction of Armada Hflr i.e., Armada Hflr and ETC On go up and down completely randomly.
Pair Corralation between Armada Hflr and ETC On
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the ETC On. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.63 times less risky than ETC On. The stock trades about -0.06 of its potential returns per unit of risk. The ETC on CMCI is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,922 in ETC on CMCI on September 13, 2024 and sell it today you would lose (11.00) from holding ETC on CMCI or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Armada Hflr Pr vs. ETC on CMCI
Performance |
| Timeline |
| Armada Hflr Pr |
| ETC on CMCI |
Armada Hflr and ETC On Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and ETC On
The main advantage of trading using opposite Armada Hflr and ETC On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, ETC On 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 ETC On will offset losses from the drop in ETC On'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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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