Correlation Between Argan and ENGlobal
Can any of the company-specific risk be diversified away by investing in both Argan and ENGlobal 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 ENGlobal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argan Inc and ENGlobal, you can compare the effects of market volatilities on Argan and ENGlobal 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 ENGlobal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argan and ENGlobal.
Diversification Opportunities for Argan and ENGlobal
Modest diversification
The 3 months correlation between Argan and ENGlobal is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Argan Inc and ENGlobal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENGlobal 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 ENGlobal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENGlobal has no effect on the direction of Argan i.e., Argan and ENGlobal go up and down completely randomly.
Pair Corralation between Argan and ENGlobal
If you would invest 108.00 in ENGlobal on November 3, 2024 and sell it today you would earn a total of 0.00 from holding ENGlobal or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Argan Inc vs. ENGlobal
Performance |
| Timeline |
| Argan Inc |
| ENGlobal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Argan and ENGlobal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argan and ENGlobal
The main advantage of trading using opposite Argan and ENGlobal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argan position performs unexpectedly, ENGlobal 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 ENGlobal will offset losses from the drop in ENGlobal's long position.| Argan vs. Arcosa Inc | Argan vs. Construction Partners | Argan vs. Topbuild Corp | Argan vs. Comfort Systems USA |
| ENGlobal vs. Fuel Tech | ENGlobal vs. Polar Power | ENGlobal vs. Ocean Power Technologies | ENGlobal vs. Pioneer Power 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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