Correlation Between Argan and Concrete Pumping
Can any of the company-specific risk be diversified away by investing in both Argan and Concrete Pumping 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 Argan and Concrete Pumping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argan Inc and Concrete Pumping Holdings, you can compare the effects of market volatilities on Argan and Concrete Pumping 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 Argan with a short position of Concrete Pumping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argan and Concrete Pumping.
Diversification Opportunities for Argan and Concrete Pumping
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Argan and Concrete is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Argan Inc and Concrete Pumping Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concrete Pumping Holdings and Argan 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 Argan Inc are associated (or correlated) with Concrete Pumping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concrete Pumping Holdings has no effect on the direction of Argan i.e., Argan and Concrete Pumping go up and down completely randomly.
Pair Corralation between Argan and Concrete Pumping
Considering the 90-day investment horizon Argan Inc is expected to generate 1.22 times more return on investment than Concrete Pumping. However, Argan is 1.22 times more volatile than Concrete Pumping Holdings. It trades about 0.19 of its potential returns per unit of risk. Concrete Pumping Holdings is currently generating about 0.0 per unit of risk. If you would invest 6,886 in Argan Inc on August 28, 2024 and sell it today you would earn a total of 8,816 from holding Argan Inc or generate 128.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argan Inc vs. Concrete Pumping Holdings
Performance |
| Timeline |
| Argan Inc |
| Concrete Pumping Holdings |
Argan and Concrete Pumping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argan and Concrete Pumping
The main advantage of trading using opposite Argan and Concrete Pumping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argan position performs unexpectedly, Concrete Pumping 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 Concrete Pumping will offset losses from the drop in Concrete Pumping's long position.The idea behind Argan Inc and Concrete Pumping Holdings 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.| Concrete Pumping vs. ACS Actividades de | Concrete Pumping vs. ACS Actividades De | Concrete Pumping vs. Badger Infrastructure Solutions | Concrete Pumping vs. MYR Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |