Correlation Between Argan and Chudenko
Can any of the company-specific risk be diversified away by investing in both Argan and Chudenko 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 Chudenko into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argan Inc and Chudenko, you can compare the effects of market volatilities on Argan and Chudenko 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 Chudenko. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argan and Chudenko.
Diversification Opportunities for Argan and Chudenko
Pay attention - limited upside
The 3 months correlation between Argan and Chudenko is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Argan Inc and Chudenko in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chudenko 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 Chudenko. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chudenko has no effect on the direction of Argan i.e., Argan and Chudenko go up and down completely randomly.
Pair Corralation between Argan and Chudenko
Considering the 90-day investment horizon Argan Inc is expected to generate 2.18 times more return on investment than Chudenko. However, Argan is 2.18 times more volatile than Chudenko. It trades about 0.13 of its potential returns per unit of risk. Chudenko is currently generating about 0.03 per unit of risk. If you would invest 3,403 in Argan Inc on September 3, 2024 and sell it today you would earn a total of 12,212 from holding Argan Inc or generate 358.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 71.72% |
| Values | Daily Returns |
Argan Inc vs. Chudenko
Performance |
| Timeline |
| Argan Inc |
| Chudenko |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Argan and Chudenko Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argan and Chudenko
The main advantage of trading using opposite Argan and Chudenko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argan position performs unexpectedly, Chudenko 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 Chudenko will offset losses from the drop in Chudenko's long position.The idea behind Argan Inc and Chudenko 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.| Chudenko vs. Eiffage SA ADR | Chudenko vs. Reliant Holdings | Chudenko vs. Aecon Group | Chudenko vs. Argan Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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