Correlation Between FlatexDEGIRO and ARMADA HOFFLER
Can any of the company-specific risk be diversified away by investing in both FlatexDEGIRO and ARMADA HOFFLER 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 FlatexDEGIRO and ARMADA HOFFLER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between flatexDEGIRO AG and ARMADA HOFFLER PR, you can compare the effects of market volatilities on FlatexDEGIRO and ARMADA HOFFLER 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 FlatexDEGIRO with a short position of ARMADA HOFFLER. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlatexDEGIRO and ARMADA HOFFLER.
Diversification Opportunities for FlatexDEGIRO and ARMADA HOFFLER
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FlatexDEGIRO and ARMADA is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding flatexDEGIRO AG and ARMADA HOFFLER PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARMADA HOFFLER PR and FlatexDEGIRO 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 flatexDEGIRO AG are associated (or correlated) with ARMADA HOFFLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARMADA HOFFLER PR has no effect on the direction of FlatexDEGIRO i.e., FlatexDEGIRO and ARMADA HOFFLER go up and down completely randomly.
Pair Corralation between FlatexDEGIRO and ARMADA HOFFLER
Assuming the 90 days horizon flatexDEGIRO AG is expected to generate 1.08 times more return on investment than ARMADA HOFFLER. However, FlatexDEGIRO is 1.08 times more volatile than ARMADA HOFFLER PR. It trades about 0.13 of its potential returns per unit of risk. ARMADA HOFFLER PR is currently generating about -0.05 per unit of risk. If you would invest 1,260 in flatexDEGIRO AG on November 2, 2024 and sell it today you would earn a total of 328.00 from holding flatexDEGIRO AG or generate 26.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
flatexDEGIRO AG vs. ARMADA HOFFLER PR
Performance |
| Timeline |
| flatexDEGIRO AG |
| ARMADA HOFFLER PR |
FlatexDEGIRO and ARMADA HOFFLER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FlatexDEGIRO and ARMADA HOFFLER
The main advantage of trading using opposite FlatexDEGIRO and ARMADA HOFFLER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlatexDEGIRO position performs unexpectedly, ARMADA HOFFLER 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 HOFFLER will offset losses from the drop in ARMADA HOFFLER's long position.| FlatexDEGIRO vs. GEAR4MUSIC LS 10 | FlatexDEGIRO vs. CAL MAINE FOODS | FlatexDEGIRO vs. Tencent Music Entertainment | FlatexDEGIRO vs. Algonquin Power Utilities |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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