Correlation Between Church Dwight and Armada Acquisition
Can any of the company-specific risk be diversified away by investing in both Church Dwight and Armada Acquisition 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 Church Dwight and Armada Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Church Dwight and Armada Acquisition Corp, you can compare the effects of market volatilities on Church Dwight and Armada Acquisition 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 Church Dwight with a short position of Armada Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Church Dwight and Armada Acquisition.
Diversification Opportunities for Church Dwight and Armada Acquisition
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Church and Armada is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Church Dwight and Armada Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Acquisition Corp and Church Dwight 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 Church Dwight are associated (or correlated) with Armada Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Acquisition Corp has no effect on the direction of Church Dwight i.e., Church Dwight and Armada Acquisition go up and down completely randomly.
Pair Corralation between Church Dwight and Armada Acquisition
Considering the 90-day investment horizon Church Dwight is expected to generate 0.09 times more return on investment than Armada Acquisition. However, Church Dwight is 11.74 times less risky than Armada Acquisition. It trades about 0.03 of its potential returns per unit of risk. Armada Acquisition Corp is currently generating about -0.13 per unit of risk. If you would invest 10,671 in Church Dwight on September 1, 2024 and sell it today you would earn a total of 342.00 from holding Church Dwight or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 46.03% |
| Values | Daily Returns |
Church Dwight vs. Armada Acquisition Corp
Performance |
| Timeline |
| Church Dwight |
| Armada Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Church Dwight and Armada Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Church Dwight and Armada Acquisition
The main advantage of trading using opposite Church Dwight and Armada Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Church Dwight position performs unexpectedly, Armada Acquisition 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 Armada Acquisition will offset losses from the drop in Armada Acquisition's long position.| Church Dwight vs. Colgate Palmolive | Church Dwight vs. Unilever PLC ADR | Church Dwight vs. Kimberly Clark | Church Dwight vs. Estee Lauder Companies |
| Armada Acquisition vs. Pool Corporation | Armada Acquisition vs. Titan Machinery | Armada Acquisition vs. Evolution Gaming Group | Armada Acquisition vs. Scandinavian Tobacco Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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