Correlation Between Argo Investments and 29Metals
Can any of the company-specific risk be diversified away by investing in both Argo Investments and 29Metals 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 Investments and 29Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Investments and 29Metals, you can compare the effects of market volatilities on Argo Investments and 29Metals 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 Investments with a short position of 29Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Investments and 29Metals.
Diversification Opportunities for Argo Investments and 29Metals
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Argo and 29Metals is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Argo Investments and 29Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 29Metals and Argo Investments 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 Investments are associated (or correlated) with 29Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 29Metals has no effect on the direction of Argo Investments i.e., Argo Investments and 29Metals go up and down completely randomly.
Pair Corralation between Argo Investments and 29Metals
Assuming the 90 days trading horizon Argo Investments is expected to generate 16.18 times less return on investment than 29Metals. But when comparing it to its historical volatility, Argo Investments is 11.27 times less risky than 29Metals. It trades about 0.02 of its potential returns per unit of risk. 29Metals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 25.00 in 29Metals on November 5, 2024 and sell it today you would lose (1.00) from holding 29Metals or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argo Investments vs. 29Metals
Performance |
| Timeline |
| Argo Investments |
| 29Metals |
Argo Investments and 29Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Investments and 29Metals
The main advantage of trading using opposite Argo Investments and 29Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Investments position performs unexpectedly, 29Metals 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 29Metals will offset losses from the drop in 29Metals' long position.| Argo Investments vs. Sky Metals | Argo Investments vs. Everest Metals | Argo Investments vs. Alternative Investment Trust | Argo Investments vs. Dalaroo Metals |
| 29Metals vs. Northern Star Resources | 29Metals vs. Evolution Mining | 29Metals vs. Bluescope Steel | 29Metals vs. De Grey Mining |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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