Correlation Between Argo Investments and Falcon Metals
Can any of the company-specific risk be diversified away by investing in both Argo Investments and Falcon Metals 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 Falcon Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Investments and Falcon Metals, you can compare the effects of market volatilities on Argo Investments and Falcon Metals 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 Falcon Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Investments and Falcon Metals.
Diversification Opportunities for Argo Investments and Falcon Metals
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Argo and Falcon is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Argo Investments and Falcon Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Metals 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 Falcon Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Metals has no effect on the direction of Argo Investments i.e., Argo Investments and Falcon Metals go up and down completely randomly.
Pair Corralation between Argo Investments and Falcon Metals
Assuming the 90 days trading horizon Argo Investments is expected to generate 7.08 times less return on investment than Falcon Metals. But when comparing it to its historical volatility, Argo Investments is 13.77 times less risky than Falcon Metals. It trades about 0.07 of its potential returns per unit of risk. Falcon Metals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Falcon Metals on September 15, 2024 and sell it today you would earn a total of 0.00 from holding Falcon Metals or generate 0.0% 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. Falcon Metals
Performance |
| Timeline |
| Argo Investments |
| Falcon Metals |
Argo Investments and Falcon Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Investments and Falcon Metals
The main advantage of trading using opposite Argo Investments and Falcon Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Investments position performs unexpectedly, Falcon Metals 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 Falcon Metals will offset losses from the drop in Falcon Metals' long position.| Argo Investments vs. Audio Pixels Holdings | Argo Investments vs. Iodm | Argo Investments vs. Nsx | Argo Investments vs. TTG Fintech |
| Falcon Metals vs. Northern Star Resources | Falcon Metals vs. Evolution Mining | Falcon Metals vs. Bluescope Steel | Falcon Metals vs. Sandfire Resources NL |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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