Correlation Between Argo Gold and Spanish Mountain
Can any of the company-specific risk be diversified away by investing in both Argo Gold and Spanish Mountain 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 Spanish Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Gold and Spanish Mountain Gold, you can compare the effects of market volatilities on Argo Gold and Spanish Mountain 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 Spanish Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Gold and Spanish Mountain.
Diversification Opportunities for Argo Gold and Spanish Mountain
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Argo and Spanish is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Argo Gold and Spanish Mountain Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spanish Mountain 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 Spanish Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spanish Mountain Gold has no effect on the direction of Argo Gold i.e., Argo Gold and Spanish Mountain go up and down completely randomly.
Pair Corralation between Argo Gold and Spanish Mountain
Assuming the 90 days horizon Argo Gold is expected to generate 1.04 times more return on investment than Spanish Mountain. However, Argo Gold is 1.04 times more volatile than Spanish Mountain Gold. It trades about 0.03 of its potential returns per unit of risk. Spanish Mountain Gold is currently generating about 0.01 per unit of risk. If you would invest 5.79 in Argo Gold on September 3, 2024 and sell it today you would lose (0.29) from holding Argo Gold or give up 5.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argo Gold vs. Spanish Mountain Gold
Performance |
| Timeline |
| Argo Gold |
| Spanish Mountain Gold |
Argo Gold and Spanish Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Gold and Spanish Mountain
The main advantage of trading using opposite Argo Gold and Spanish Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Gold position performs unexpectedly, Spanish Mountain 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 Spanish Mountain will offset losses from the drop in Spanish Mountain's long position.| Argo Gold vs. Blue Star Gold | Argo Gold vs. Angkor Resources Corp | Argo Gold vs. Advance Gold Corp | Argo Gold vs. Advance United Holdings |
| Spanish Mountain vs. Argo Gold | Spanish Mountain vs. Advance Gold Corp | Spanish Mountain vs. Angkor Resources Corp | Spanish Mountain vs. Minnova Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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