Correlation Between Argo Group and LBG Media
Can any of the company-specific risk be diversified away by investing in both Argo Group and LBG Media 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 LBG Media 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 LBG Media PLC, you can compare the effects of market volatilities on Argo Group and LBG Media 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 LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Group and LBG Media.
Diversification Opportunities for Argo Group and LBG Media
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Argo and LBG is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Argo Group Limited and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC 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 LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of Argo Group i.e., Argo Group and LBG Media go up and down completely randomly.
Pair Corralation between Argo Group and LBG Media
Assuming the 90 days trading horizon Argo Group Limited is expected to under-perform the LBG Media. In addition to that, Argo Group is 1.38 times more volatile than LBG Media PLC. It trades about -0.04 of its total potential returns per unit of risk. LBG Media PLC is currently generating about 0.02 per unit of volatility. If you would invest 11,000 in LBG Media PLC on September 13, 2024 and sell it today you would earn a total of 1,400 from holding LBG Media PLC or generate 12.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argo Group Limited vs. LBG Media PLC
Performance |
| Timeline |
| Argo Group Limited |
| LBG Media PLC |
Argo Group and LBG Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Group and LBG Media
The main advantage of trading using opposite Argo Group and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Group position performs unexpectedly, LBG Media 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 LBG Media will offset losses from the drop in LBG Media's long position.| Argo Group vs. Catalyst Media Group | Argo Group vs. CATLIN GROUP | Argo Group vs. Tamburi Investment Partners | Argo Group vs. Magnora ASA |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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