Correlation Between Armada Hflr and Medibank Private

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Medibank Private 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 Medibank Private 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 Medibank Private, you can compare the effects of market volatilities on Armada Hflr and Medibank Private 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 Medibank Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Medibank Private.

Diversification Opportunities for Armada Hflr and Medibank Private

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Correlation Coefficient

Armada Hflr  Medibank Private

Pay attention - limited upside

The 3 months correlation between Armada and Medibank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Medibank Private in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medibank Private 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 Medibank Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medibank Private has no effect on the direction of Armada Hflr i.e., Armada Hflr and Medibank Private go up and down completely randomly.

Pair Corralation between Armada Hflr and Medibank Private

Considering the 90-day investment horizon Armada Hflr is expected to generate 2.66 times less return on investment than Medibank Private. In addition to that, Armada Hflr is 1.33 times more volatile than Medibank Private. It trades about 0.02 of its total potential returns per unit of risk. Medibank Private is currently generating about 0.06 per unit of volatility. If you would invest  271.00  in Medibank Private on September 14, 2024 and sell it today you would earn a total of  103.00  from holding Medibank Private or generate 38.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

Armada Hflr Pr  vs.  Medibank Private

Armada Hflr Pr

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Medibank Private

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medibank Private has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Medibank Private is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Armada Hflr and Medibank Private

The main advantage of trading using opposite Armada Hflr and Medibank Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Medibank Private 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 Medibank Private will offset losses from the drop in Medibank Private's long position.

The idea behind Armada Hflr Pr and Medibank Private pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.