Correlation Between Argo Investments and Flagship Investments
Can any of the company-specific risk be diversified away by investing in both Argo Investments and Flagship Investments 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 Flagship Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Investments and Flagship Investments, you can compare the effects of market volatilities on Argo Investments and Flagship Investments 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 Flagship Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Investments and Flagship Investments.
Diversification Opportunities for Argo Investments and Flagship Investments
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Argo and Flagship is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Argo Investments and Flagship Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flagship Investments 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 Flagship Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flagship Investments has no effect on the direction of Argo Investments i.e., Argo Investments and Flagship Investments go up and down completely randomly.
Pair Corralation between Argo Investments and Flagship Investments
Assuming the 90 days trading horizon Argo Investments is expected to generate 2.74 times less return on investment than Flagship Investments. But when comparing it to its historical volatility, Argo Investments is 2.55 times less risky than Flagship Investments. It trades about 0.24 of its potential returns per unit of risk. Flagship Investments is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 200.00 in Flagship Investments on August 30, 2024 and sell it today you would earn a total of 15.00 from holding Flagship Investments or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argo Investments vs. Flagship Investments
Performance |
| Timeline |
| Argo Investments |
| Flagship Investments |
Argo Investments and Flagship Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Investments and Flagship Investments
The main advantage of trading using opposite Argo Investments and Flagship Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Investments position performs unexpectedly, Flagship Investments 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 Flagship Investments will offset losses from the drop in Flagship Investments' long position.| Argo Investments vs. MotorCycle Holdings | Argo Investments vs. Ramsay Health Care | Argo Investments vs. Fisher Paykel Healthcare | Argo Investments vs. M3 Mining |
| Flagship Investments vs. Carnegie Clean Energy | Flagship Investments vs. Platinum Asia Investments | Flagship Investments vs. A1 Investments Resources | Flagship Investments vs. Alto Metals |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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