Correlation Between Argo Blockchain and BT Group
Can any of the company-specific risk be diversified away by investing in both Argo Blockchain and BT 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 Argo Blockchain and BT Group 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 BT Group Plc, you can compare the effects of market volatilities on Argo Blockchain and BT 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 Argo Blockchain with a short position of BT Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Blockchain and BT Group.
Diversification Opportunities for Argo Blockchain and BT Group
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Argo and BT-A is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Argo Blockchain PLC and BT Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BT Group Plc 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 BT Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BT Group Plc has no effect on the direction of Argo Blockchain i.e., Argo Blockchain and BT Group go up and down completely randomly.
Pair Corralation between Argo Blockchain and BT Group
Assuming the 90 days trading horizon Argo Blockchain PLC is expected to under-perform the BT Group. In addition to that, Argo Blockchain is 4.35 times more volatile than BT Group Plc. It trades about -0.04 of its total potential returns per unit of risk. BT Group Plc is currently generating about 0.23 per unit of volatility. If you would invest 14,280 in BT Group Plc on August 29, 2024 and sell it today you would earn a total of 1,570 from holding BT Group Plc or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argo Blockchain PLC vs. BT Group Plc
Performance |
| Timeline |
| Argo Blockchain PLC |
| BT Group Plc |
Argo Blockchain and BT Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Blockchain and BT Group
The main advantage of trading using opposite Argo Blockchain and BT Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Blockchain position performs unexpectedly, BT 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 BT Group will offset losses from the drop in BT Group's long position.| Argo Blockchain vs. Automatic Data Processing | Argo Blockchain vs. Silvercorp Metals | Argo Blockchain vs. MTI Wireless Edge | Argo Blockchain vs. Ecclesiastical Insurance Office |
| BT Group vs. FC Investment Trust | BT Group vs. Coor Service Management | BT Group vs. STMicroelectronics NV | BT Group vs. Hansa Investment |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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