Correlation Between Argo Blockchain and SM Energy
Can any of the company-specific risk be diversified away by investing in both Argo Blockchain and SM Energy 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 Argo Blockchain and SM Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Blockchain PLC and SM Energy Co, you can compare the effects of market volatilities on Argo Blockchain and SM Energy 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 Argo Blockchain with a short position of SM Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Blockchain and SM Energy.
Diversification Opportunities for Argo Blockchain and SM Energy
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Argo and 0KZA is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Argo Blockchain PLC and SM Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Energy and Argo Blockchain 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 Argo Blockchain PLC are associated (or correlated) with SM Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM Energy has no effect on the direction of Argo Blockchain i.e., Argo Blockchain and SM Energy go up and down completely randomly.
Pair Corralation between Argo Blockchain and SM Energy
Assuming the 90 days trading horizon Argo Blockchain PLC is expected to generate 3.21 times more return on investment than SM Energy. However, Argo Blockchain is 3.21 times more volatile than SM Energy Co. It trades about 0.05 of its potential returns per unit of risk. SM Energy Co is currently generating about 0.03 per unit of risk. If you would invest 660.00 in Argo Blockchain PLC on August 27, 2024 and sell it today you would earn a total of 190.00 from holding Argo Blockchain PLC or generate 28.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.36% |
| Values | Daily Returns |
Argo Blockchain PLC vs. SM Energy Co
Performance |
| Timeline |
| Argo Blockchain PLC |
| SM Energy |
Argo Blockchain and SM Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Blockchain and SM Energy
The main advantage of trading using opposite Argo Blockchain and SM Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Blockchain position performs unexpectedly, SM Energy 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 SM Energy will offset losses from the drop in SM Energy's long position.| Argo Blockchain vs. Fonix Mobile plc | Argo Blockchain vs. Automatic Data Processing | Argo Blockchain vs. Spirent Communications plc | Argo Blockchain vs. Cairo Communication SpA |
| SM Energy vs. Endeavour Mining Corp | SM Energy vs. Thor Mining PLC | SM Energy vs. iShares Physical Silver | SM Energy vs. Metals Exploration Plc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |