Correlation Between Argo Investments and Akora Resources
Can any of the company-specific risk be diversified away by investing in both Argo Investments and Akora Resources 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 Akora Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Investments and Akora Resources, you can compare the effects of market volatilities on Argo Investments and Akora Resources 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 Akora Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Investments and Akora Resources.
Diversification Opportunities for Argo Investments and Akora Resources
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Argo and Akora is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Argo Investments and Akora Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akora Resources 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 Akora Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akora Resources has no effect on the direction of Argo Investments i.e., Argo Investments and Akora Resources go up and down completely randomly.
Pair Corralation between Argo Investments and Akora Resources
Assuming the 90 days trading horizon Argo Investments is expected to generate 7.96 times less return on investment than Akora Resources. But when comparing it to its historical volatility, Argo Investments is 11.67 times less risky than Akora Resources. It trades about 0.12 of its potential returns per unit of risk. Akora Resources is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9.10 in Akora Resources on September 12, 2024 and sell it today you would earn a total of 1.90 from holding Akora Resources or generate 20.88% 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. Akora Resources
Performance |
| Timeline |
| Argo Investments |
| Akora Resources |
Argo Investments and Akora Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Investments and Akora Resources
The main advantage of trading using opposite Argo Investments and Akora Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Investments position performs unexpectedly, Akora Resources 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 Akora Resources will offset losses from the drop in Akora Resources' long position.| Argo Investments vs. Charter Hall Education | Argo Investments vs. Pioneer Credit | Argo Investments vs. Commonwealth Bank of | Argo Investments vs. Medical Developments International |
| Akora Resources vs. EMvision Medical Devices | Akora Resources vs. Data3 | Akora Resources vs. Autosports Group | Akora Resources vs. Flagship 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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