Correlation Between Argo Investments and Aspire Mining
Can any of the company-specific risk be diversified away by investing in both Argo Investments and Aspire Mining 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 Aspire Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Investments and Aspire Mining, you can compare the effects of market volatilities on Argo Investments and Aspire Mining 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 Aspire Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Investments and Aspire Mining.
Diversification Opportunities for Argo Investments and Aspire Mining
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Argo and Aspire is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Argo Investments and Aspire Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspire Mining 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 Aspire Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspire Mining has no effect on the direction of Argo Investments i.e., Argo Investments and Aspire Mining go up and down completely randomly.
Pair Corralation between Argo Investments and Aspire Mining
Assuming the 90 days trading horizon Argo Investments is expected to generate 0.15 times more return on investment than Aspire Mining. However, Argo Investments is 6.8 times less risky than Aspire Mining. It trades about 0.43 of its potential returns per unit of risk. Aspire Mining is currently generating about 0.02 per unit of risk. If you would invest 872.00 in Argo Investments on September 4, 2024 and sell it today you would earn a total of 47.00 from holding Argo Investments or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argo Investments vs. Aspire Mining
Performance |
| Timeline |
| Argo Investments |
| Aspire Mining |
Argo Investments and Aspire Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Investments and Aspire Mining
The main advantage of trading using opposite Argo Investments and Aspire Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Investments position performs unexpectedly, Aspire Mining 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 Aspire Mining will offset losses from the drop in Aspire Mining's long position.| Argo Investments vs. Westpac Banking | Argo Investments vs. Ecofibre | Argo Investments vs. Adriatic Metals Plc | Argo Investments vs. Australian Dairy Farms |
| Aspire Mining vs. Westpac Banking | Aspire Mining vs. Microequities Asset Management | Aspire Mining vs. Steamships Trading | Aspire Mining vs. Argo Investments |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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