Correlation Between Argen X and Elia Group
Can any of the company-specific risk be diversified away by investing in both Argen X and Elia Group 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 Argen X and Elia Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argen X and Elia Group SANV, you can compare the effects of market volatilities on Argen X and Elia Group 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 Argen X with a short position of Elia Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argen X and Elia Group.
Diversification Opportunities for Argen X and Elia Group
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Argen and Elia is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Argen X and Elia Group SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elia Group SANV and Argen X 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 Argen X are associated (or correlated) with Elia Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elia Group SANV has no effect on the direction of Argen X i.e., Argen X and Elia Group go up and down completely randomly.
Pair Corralation between Argen X and Elia Group
Assuming the 90 days trading horizon Argen X is expected to generate 1.8 times more return on investment than Elia Group. However, Argen X is 1.8 times more volatile than Elia Group SANV. It trades about 0.06 of its potential returns per unit of risk. Elia Group SANV is currently generating about -0.04 per unit of risk. If you would invest 35,580 in Argen X on August 26, 2024 and sell it today you would earn a total of 22,680 from holding Argen X or generate 63.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argen X vs. Elia Group SANV
Performance |
| Timeline |
| Argen X |
| Elia Group SANV |
Argen X and Elia Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argen X and Elia Group
The main advantage of trading using opposite Argen X and Elia Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argen X position performs unexpectedly, Elia Group 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 Elia Group will offset losses from the drop in Elia Group's long position.The idea behind Argen X and Elia Group SANV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Elia Group vs. Ackermans Van Haaren | Elia Group vs. Groep Brussel Lambert | Elia Group vs. Sofina Socit Anonyme | Elia Group vs. ageas SANV |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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