Correlation Between Argo Investments and BHP Group
Can any of the company-specific risk be diversified away by investing in both Argo Investments and BHP Group 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 BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Investments and BHP Group Limited, you can compare the effects of market volatilities on Argo Investments and BHP Group 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 BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Investments and BHP Group.
Diversification Opportunities for Argo Investments and BHP Group
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Argo and BHP is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Argo Investments and BHP Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHP Group Limited 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 BHP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHP Group Limited has no effect on the direction of Argo Investments i.e., Argo Investments and BHP Group go up and down completely randomly.
Pair Corralation between Argo Investments and BHP Group
Assuming the 90 days trading horizon Argo Investments is expected to generate 0.56 times more return on investment than BHP Group. However, Argo Investments is 1.79 times less risky than BHP Group. It trades about 0.02 of its potential returns per unit of risk. BHP Group Limited is currently generating about 0.0 per unit of risk. If you would invest 900.00 in Argo Investments on September 19, 2024 and sell it today you would earn a total of 2.00 from holding Argo Investments or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argo Investments vs. BHP Group Limited
Performance |
| Timeline |
| Argo Investments |
| BHP Group Limited |
Argo Investments and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Investments and BHP Group
The main advantage of trading using opposite Argo Investments and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Investments position performs unexpectedly, BHP Group 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 BHP Group will offset losses from the drop in BHP Group's long position.| Argo Investments vs. Audio Pixels Holdings | Argo Investments vs. Iodm | Argo Investments vs. Nsx | Argo Investments vs. TTG Fintech |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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