Correlation Between Cars and Argo Group
Can any of the company-specific risk be diversified away by investing in both Cars and Argo Group 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 Cars and Argo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cars Inc and Argo Group Limited, you can compare the effects of market volatilities on Cars and Argo Group 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 Cars with a short position of Argo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cars and Argo Group.
Diversification Opportunities for Cars and Argo Group
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cars and Argo is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cars Inc and Argo Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Group Limited and Cars 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 Cars Inc are associated (or correlated) with Argo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Group Limited has no effect on the direction of Cars i.e., Cars and Argo Group go up and down completely randomly.
Pair Corralation between Cars and Argo Group
Assuming the 90 days trading horizon Cars Inc is expected to generate 0.65 times more return on investment than Argo Group. However, Cars Inc is 1.54 times less risky than Argo Group. It trades about 0.01 of its potential returns per unit of risk. Argo Group Limited is currently generating about 0.0 per unit of risk. If you would invest 1,791 in Cars Inc on October 27, 2024 and sell it today you would lose (14.00) from holding Cars Inc or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.4% |
| Values | Daily Returns |
Cars Inc vs. Argo Group Limited
Performance |
| Timeline |
| Cars Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Argo Group Limited |
Cars and Argo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cars and Argo Group
The main advantage of trading using opposite Cars and Argo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cars position performs unexpectedly, Argo Group 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 Argo Group will offset losses from the drop in Argo Group's long position.| Cars vs. Cairo Communication SpA | Cars vs. Gear4music Plc | Cars vs. CleanTech Lithium plc | Cars vs. MTI Wireless Edge |
| Argo Group vs. Norman Broadbent Plc | Argo Group vs. Pfeiffer Vacuum Technology | Argo Group vs. Gaztransport et Technigaz | Argo Group vs. Broadridge Financial Solutions |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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