Correlation Between Argo Group and Sparta Capital
Can any of the company-specific risk be diversified away by investing in both Argo Group and Sparta Capital 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 Group and Sparta Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Group International and Sparta Capital, you can compare the effects of market volatilities on Argo Group and Sparta Capital 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 Group with a short position of Sparta Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Group and Sparta Capital.
Diversification Opportunities for Argo Group and Sparta Capital
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Argo and Sparta is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Argo Group International and Sparta Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparta Capital and Argo Group 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 Group International are associated (or correlated) with Sparta Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparta Capital has no effect on the direction of Argo Group i.e., Argo Group and Sparta Capital go up and down completely randomly.
Pair Corralation between Argo Group and Sparta Capital
Assuming the 90 days trading horizon Argo Group International is expected to generate 0.05 times more return on investment than Sparta Capital. However, Argo Group International is 18.18 times less risky than Sparta Capital. It trades about 0.2 of its potential returns per unit of risk. Sparta Capital is currently generating about -0.21 per unit of risk. If you would invest 2,474 in Argo Group International on August 24, 2024 and sell it today you would earn a total of 30.00 from holding Argo Group International or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argo Group International vs. Sparta Capital
Performance |
| Timeline |
| Argo Group International |
| Sparta Capital |
Argo Group and Sparta Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Group and Sparta Capital
The main advantage of trading using opposite Argo Group and Sparta Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Group position performs unexpectedly, Sparta Capital 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 Sparta Capital will offset losses from the drop in Sparta Capital's long position.| Argo Group vs. Centessa Pharmaceuticals PLC | Argo Group vs. Amgen Inc | Argo Group vs. Western Digital | Argo Group vs. Kaltura |
| Sparta Capital vs. Shimano Inc ADR | Sparta Capital vs. Yamaha Corp DRC | Sparta Capital vs. Vista Outdoor | Sparta Capital vs. Hasbro Inc |
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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