Correlation Between Argo Gold and Big Ridge
Can any of the company-specific risk be diversified away by investing in both Argo Gold and Big Ridge 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 Gold and Big Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Gold and Big Ridge Gold, you can compare the effects of market volatilities on Argo Gold and Big Ridge 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 Gold with a short position of Big Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Gold and Big Ridge.
Diversification Opportunities for Argo Gold and Big Ridge
Good diversification
The 3 months correlation between Argo and Big is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Argo Gold and Big Ridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Ridge Gold and Argo Gold 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 Gold are associated (or correlated) with Big Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Ridge Gold has no effect on the direction of Argo Gold i.e., Argo Gold and Big Ridge go up and down completely randomly.
Pair Corralation between Argo Gold and Big Ridge
Assuming the 90 days horizon Argo Gold is expected to under-perform the Big Ridge. But the pink sheet apears to be less risky and, when comparing its historical volatility, Argo Gold is 1.64 times less risky than Big Ridge. The pink sheet trades about -0.24 of its potential returns per unit of risk. The Big Ridge Gold is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Big Ridge Gold on August 29, 2024 and sell it today you would lose (1.21) from holding Big Ridge Gold or give up 15.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Argo Gold vs. Big Ridge Gold
Performance |
| Timeline |
| Argo Gold |
| Big Ridge Gold |
Argo Gold and Big Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Gold and Big Ridge
The main advantage of trading using opposite Argo Gold and Big Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Gold position performs unexpectedly, Big Ridge 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 Big Ridge will offset losses from the drop in Big Ridge's long position.| Argo Gold vs. Vertiv Holdings Co | Argo Gold vs. Nasdaq Inc | Argo Gold vs. McDonalds | Argo Gold vs. Walmart |
| Big Ridge vs. Vertiv Holdings Co | Big Ridge vs. Nasdaq Inc | Big Ridge vs. McDonalds | Big Ridge vs. Walmart |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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