Correlation Between AJ Bell and Argo Group
Can any of the company-specific risk be diversified away by investing in both AJ Bell and Argo Group 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 AJ Bell and Argo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJ Bell plc and Argo Group Limited, you can compare the effects of market volatilities on AJ Bell and Argo Group 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 AJ Bell with a short position of Argo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Bell and Argo Group.
Diversification Opportunities for AJ Bell and Argo Group
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AJB and Argo is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding AJ Bell plc and Argo Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Group Limited and AJ Bell 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 AJ Bell plc are associated (or correlated) with Argo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Group Limited has no effect on the direction of AJ Bell i.e., AJ Bell and Argo Group go up and down completely randomly.
Pair Corralation between AJ Bell and Argo Group
Assuming the 90 days trading horizon AJ Bell plc is expected to generate 0.48 times more return on investment than Argo Group. However, AJ Bell plc is 2.1 times less risky than Argo Group. It trades about 0.08 of its potential returns per unit of risk. Argo Group Limited is currently generating about 0.02 per unit of risk. If you would invest 44,950 in AJ Bell plc on August 31, 2024 and sell it today you would earn a total of 2,350 from holding AJ Bell plc or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AJ Bell plc vs. Argo Group Limited
Performance |
| Timeline |
| AJ Bell plc |
| Argo Group Limited |
AJ Bell and Argo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Bell and Argo Group
The main advantage of trading using opposite AJ Bell and Argo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Bell position performs unexpectedly, Argo Group 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 Argo Group will offset losses from the drop in Argo Group's long position.| AJ Bell vs. Premier Foods PLC | AJ Bell vs. Sligro Food Group | AJ Bell vs. Pfeiffer Vacuum Technology | AJ Bell vs. Spotify Technology SA |
| Argo Group vs. Charter Communications Cl | Argo Group vs. Sparebank 1 SR | Argo Group vs. MTI Wireless Edge | Argo Group vs. Bank of Ireland |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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