Correlation Between Argo Group and Diversified Energy
Can any of the company-specific risk be diversified away by investing in both Argo Group and Diversified Energy 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 Diversified Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Group Limited and Diversified Energy, you can compare the effects of market volatilities on Argo Group and Diversified Energy 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 Diversified Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Group and Diversified Energy.
Diversification Opportunities for Argo Group and Diversified Energy
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Argo and Diversified is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Argo Group Limited and Diversified Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified Energy 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 Limited are associated (or correlated) with Diversified Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified Energy has no effect on the direction of Argo Group i.e., Argo Group and Diversified Energy go up and down completely randomly.
Pair Corralation between Argo Group and Diversified Energy
Assuming the 90 days trading horizon Argo Group Limited is expected to generate 0.84 times more return on investment than Diversified Energy. However, Argo Group Limited is 1.19 times less risky than Diversified Energy. It trades about 0.16 of its potential returns per unit of risk. Diversified Energy is currently generating about 0.03 per unit of risk. If you would invest 400.00 in Argo Group Limited on November 3, 2024 and sell it today you would earn a total of 50.00 from holding Argo Group Limited or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Argo Group Limited vs. Diversified Energy
Performance |
| Timeline |
| Argo Group Limited |
| Diversified Energy |
Argo Group and Diversified Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Group and Diversified Energy
The main advantage of trading using opposite Argo Group and Diversified Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Group position performs unexpectedly, Diversified Energy 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 Diversified Energy will offset losses from the drop in Diversified Energy's long position.| Argo Group vs. Bankers Investment Trust | Argo Group vs. Xeros Technology Group | Argo Group vs. British American Tobacco | Argo Group vs. DXC Technology Co |
| Diversified Energy vs. Zoom Video Communications | Diversified Energy vs. Enbridge | Diversified Energy vs. Endo International PLC | Diversified Energy vs. Liechtensteinische Landesbank AG |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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