Correlation Between Broadleaf and Argo Group
Can any of the company-specific risk be diversified away by investing in both Broadleaf and Argo 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 Broadleaf and Argo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadleaf Co and Argo Group International, you can compare the effects of market volatilities on Broadleaf and Argo 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 Broadleaf with a short position of Argo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadleaf and Argo Group.
Diversification Opportunities for Broadleaf and Argo Group
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Broadleaf and Argo is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Broadleaf Co and Argo Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Group International and Broadleaf 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 Broadleaf Co are associated (or correlated) with Argo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Group International has no effect on the direction of Broadleaf i.e., Broadleaf and Argo Group go up and down completely randomly.
Pair Corralation between Broadleaf and Argo Group
Assuming the 90 days horizon Broadleaf Co is expected to generate 2.72 times more return on investment than Argo Group. However, Broadleaf is 2.72 times more volatile than Argo Group International. It trades about 0.04 of its potential returns per unit of risk. Argo Group International is currently generating about 0.04 per unit of risk. If you would invest 308.00 in Broadleaf Co on December 18, 2024 and sell it today you would earn a total of 200.00 from holding Broadleaf Co or generate 64.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.81% |
| Values | Daily Returns |
Broadleaf Co vs. Argo Group International
Performance |
| Timeline |
| Broadleaf |
| Argo Group International |
Broadleaf and Argo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadleaf and Argo Group
The main advantage of trading using opposite Broadleaf and Argo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadleaf position performs unexpectedly, Argo 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 Argo Group will offset losses from the drop in Argo Group's long position.| Broadleaf vs. NextPlat Corp | ||
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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