Correlation Between Argosy Minerals and Spearmint Resources
Can any of the company-specific risk be diversified away by investing in both Argosy Minerals and Spearmint 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 Spearmint 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 Spearmint Resources, you can compare the effects of market volatilities on Argosy Minerals and Spearmint 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 Spearmint Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argosy Minerals and Spearmint Resources.
Diversification Opportunities for Argosy Minerals and Spearmint Resources
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Argosy and Spearmint is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Argosy Minerals Limited and Spearmint Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spearmint 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 Spearmint Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spearmint Resources has no effect on the direction of Argosy Minerals i.e., Argosy Minerals and Spearmint Resources go up and down completely randomly.
Pair Corralation between Argosy Minerals and Spearmint Resources
Assuming the 90 days horizon Argosy Minerals Limited is expected to under-perform the Spearmint Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Argosy Minerals Limited is 2.69 times less risky than Spearmint Resources. The pink sheet trades about -0.23 of its potential returns per unit of risk. The Spearmint Resources is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1.59 in Spearmint Resources on September 3, 2024 and sell it today you would lose (0.05) from holding Spearmint Resources or give up 3.14% 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. Spearmint Resources
Performance |
| Timeline |
| Argosy Minerals |
| Spearmint Resources |
Argosy Minerals and Spearmint Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argosy Minerals and Spearmint Resources
The main advantage of trading using opposite Argosy Minerals and Spearmint Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argosy Minerals position performs unexpectedly, Spearmint 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 Spearmint Resources will offset losses from the drop in Spearmint Resources' long position.| Argosy Minerals vs. Qubec Nickel Corp | Argosy Minerals vs. IGO Limited | Argosy Minerals vs. Avarone Metals | Argosy Minerals vs. Adriatic Metals PLC |
| Spearmint Resources vs. Qubec Nickel Corp | Spearmint Resources vs. IGO Limited | Spearmint Resources vs. Avarone Metals | Spearmint Resources vs. Adriatic Metals PLC |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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