Correlation Between CryptoStar Corp and Armada Mercantile

Can any of the company-specific risk be diversified away by investing in both CryptoStar Corp and Armada Mercantile 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 CryptoStar Corp and Armada Mercantile into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CryptoStar Corp and Armada Mercantile, you can compare the effects of market volatilities on CryptoStar Corp and Armada Mercantile 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 CryptoStar Corp with a short position of Armada Mercantile. Check out your portfolio center. Please also check ongoing floating volatility patterns of CryptoStar Corp and Armada Mercantile.

Diversification Opportunities for CryptoStar Corp and Armada Mercantile

0.27

Correlation Coefficient

CryptoStar Corp  Armada Mercantile

Modest diversification

The 3 months correlation between CryptoStar and Armada is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding CryptoStar Corp and Armada Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Mercantile and CryptoStar Corp 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 CryptoStar Corp are associated (or correlated) with Armada Mercantile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Mercantile has no effect on the direction of CryptoStar Corp i.e., CryptoStar Corp and Armada Mercantile go up and down completely randomly.

Pair Corralation between CryptoStar Corp and Armada Mercantile

Assuming the 90 days horizon CryptoStar Corp is expected to generate 1.42 times more return on investment than Armada Mercantile. However, CryptoStar Corp is 1.42 times more volatile than Armada Mercantile. It trades about 0.0 of its potential returns per unit of risk. Armada Mercantile is currently generating about -0.01 per unit of risk. If you would invest  1.44  in CryptoStar Corp on May 4, 2025 and sell it today you would lose (0.30) from holding CryptoStar Corp or give up 20.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

CryptoStar Corp  vs.  Armada Mercantile

CryptoStar Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days CryptoStar Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CryptoStar Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Armada Mercantile

Risk-Adjusted Performance

Very Weak

Over the last 90 days Armada Mercantile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Armada Mercantile is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CryptoStar Corp and Armada Mercantile

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

The idea behind CryptoStar Corp and Armada Mercantile 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.