Correlation Between Argosy Minerals and Ascendant Resources
Can any of the company-specific risk be diversified away by investing in both Argosy Minerals and Ascendant Resources 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 Argosy Minerals and Ascendant Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argosy Minerals Limited and Ascendant Resources, you can compare the effects of market volatilities on Argosy Minerals and Ascendant Resources 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 Argosy Minerals with a short position of Ascendant Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argosy Minerals and Ascendant Resources.
Diversification Opportunities for Argosy Minerals and Ascendant Resources
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Argosy and Ascendant is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Argosy Minerals Limited and Ascendant Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendant Resources and Argosy Minerals 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 Argosy Minerals Limited are associated (or correlated) with Ascendant Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendant Resources has no effect on the direction of Argosy Minerals i.e., Argosy Minerals and Ascendant Resources go up and down completely randomly.
Pair Corralation between Argosy Minerals and Ascendant Resources
Assuming the 90 days horizon Argosy Minerals Limited is expected to under-perform the Ascendant Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Argosy Minerals Limited is 1.22 times less risky than Ascendant Resources. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Ascendant Resources is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Ascendant Resources on September 2, 2024 and sell it today you would lose (11.00) from holding Ascendant Resources or give up 78.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argosy Minerals Limited vs. Ascendant Resources
Performance |
| Timeline |
| Argosy Minerals |
| Ascendant Resources |
Argosy Minerals and Ascendant Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argosy Minerals and Ascendant Resources
The main advantage of trading using opposite Argosy Minerals and Ascendant Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argosy Minerals position performs unexpectedly, Ascendant Resources 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 Ascendant Resources will offset losses from the drop in Ascendant Resources' long position.| Argosy Minerals vs. ATT Inc | Argosy Minerals vs. Merck Company | Argosy Minerals vs. Walt Disney | Argosy Minerals vs. Caterpillar |
| Ascendant Resources vs. ATT Inc | Ascendant Resources vs. Merck Company | Ascendant Resources vs. Walt Disney | Ascendant Resources vs. Caterpillar |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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