Correlation Between Argen X and European Metals
Can any of the company-specific risk be diversified away by investing in both Argen X and European Metals 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 Argen X and European Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argen X and European Metals Holdings, you can compare the effects of market volatilities on Argen X and European Metals 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 Argen X with a short position of European Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argen X and European Metals.
Diversification Opportunities for Argen X and European Metals
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Argen and European is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Argen X and European Metals Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Metals Holdings and Argen X 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 Argen X are associated (or correlated) with European Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Metals Holdings has no effect on the direction of Argen X i.e., Argen X and European Metals go up and down completely randomly.
Pair Corralation between Argen X and European Metals
Assuming the 90 days trading horizon Argen X is expected to generate 0.74 times more return on investment than European Metals. However, Argen X is 1.35 times less risky than European Metals. It trades about 0.06 of its potential returns per unit of risk. European Metals Holdings is currently generating about -0.08 per unit of risk. If you would invest 37,033 in Argen X on September 19, 2024 and sell it today you would earn a total of 23,527 from holding Argen X or generate 63.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.75% |
| Values | Daily Returns |
Argen X vs. European Metals Holdings
Performance |
| Timeline |
| Argen X |
| European Metals Holdings |
Argen X and European Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argen X and European Metals
The main advantage of trading using opposite Argen X and European Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argen X position performs unexpectedly, European Metals 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 European Metals will offset losses from the drop in European Metals' long position.| Argen X vs. Vitec Software Group | Argen X vs. European Metals Holdings | Argen X vs. URU Metals | Argen X vs. Silvercorp Metals |
| European Metals vs. Givaudan SA | European Metals vs. Antofagasta PLC | European Metals vs. Ferrexpo PLC | European Metals vs. Atalaya Mining |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |