Correlation Between Argan and Cadeler AS
Can any of the company-specific risk be diversified away by investing in both Argan and Cadeler AS 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 Cadeler AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argan Inc and Cadeler AS, you can compare the effects of market volatilities on Argan and Cadeler AS 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 Cadeler AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argan and Cadeler AS.
Diversification Opportunities for Argan and Cadeler AS
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Argan and Cadeler is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Argan Inc and Cadeler AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadeler AS 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 Cadeler AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadeler AS has no effect on the direction of Argan i.e., Argan and Cadeler AS go up and down completely randomly.
Pair Corralation between Argan and Cadeler AS
Considering the 90-day investment horizon Argan Inc is expected to generate 2.15 times more return on investment than Cadeler AS. However, Argan is 2.15 times more volatile than Cadeler AS. It trades about 0.02 of its potential returns per unit of risk. Cadeler AS is currently generating about -0.2 per unit of risk. If you would invest 13,660 in Argan Inc on November 1, 2024 and sell it today you would earn a total of 30.00 from holding Argan Inc or generate 0.22% 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. Cadeler AS
Performance |
| Timeline |
| Argan Inc |
| Cadeler AS |
Argan and Cadeler AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argan and Cadeler AS
The main advantage of trading using opposite Argan and Cadeler AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argan position performs unexpectedly, Cadeler AS 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 Cadeler AS will offset losses from the drop in Cadeler AS's long position.| Argan vs. Arcosa Inc | Argan vs. Construction Partners | Argan vs. Topbuild Corp | Argan vs. Comfort Systems USA |
| Cadeler AS vs. FDG Electric Vehicles | Cadeler AS vs. Magna International | Cadeler AS vs. Barrick Gold Corp | Cadeler AS vs. Modine Manufacturing |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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