Correlation Between Babcock Wilcox and Argo Blockchain
Can any of the company-specific risk be diversified away by investing in both Babcock Wilcox and Argo Blockchain 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 Babcock Wilcox and Argo Blockchain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Babcock Wilcox Enterprises, and Argo Blockchain plc, you can compare the effects of market volatilities on Babcock Wilcox and Argo Blockchain 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 Babcock Wilcox with a short position of Argo Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Babcock Wilcox and Argo Blockchain.
Diversification Opportunities for Babcock Wilcox and Argo Blockchain
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Babcock and Argo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Babcock Wilcox Enterprises, and Argo Blockchain plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Blockchain plc and Babcock Wilcox 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 Babcock Wilcox Enterprises, are associated (or correlated) with Argo Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Blockchain plc has no effect on the direction of Babcock Wilcox i.e., Babcock Wilcox and Argo Blockchain go up and down completely randomly.
Pair Corralation between Babcock Wilcox and Argo Blockchain
Given the investment horizon of 90 days Babcock Wilcox Enterprises, is expected to generate 0.41 times more return on investment than Argo Blockchain. However, Babcock Wilcox Enterprises, is 2.43 times less risky than Argo Blockchain. It trades about 0.17 of its potential returns per unit of risk. Argo Blockchain plc is currently generating about -0.01 per unit of risk. If you would invest 2,145 in Babcock Wilcox Enterprises, on August 28, 2024 and sell it today you would earn a total of 194.00 from holding Babcock Wilcox Enterprises, or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Babcock Wilcox Enterprises, vs. Argo Blockchain plc
Performance |
| Timeline |
| Babcock Wilcox Enter |
| Argo Blockchain plc |
Babcock Wilcox and Argo Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Babcock Wilcox and Argo Blockchain
The main advantage of trading using opposite Babcock Wilcox and Argo Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Babcock Wilcox position performs unexpectedly, Argo Blockchain 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 Blockchain will offset losses from the drop in Argo Blockchain's long position.| Babcock Wilcox vs. Harrow Health 8625 | Babcock Wilcox vs. Babcock Wilcox Enterprises | Babcock Wilcox vs. B Riley Financial | Babcock Wilcox vs. Eagle Point Credit |
| Argo Blockchain vs. SAIHEAT Limited | Argo Blockchain vs. eBay Inc | Argo Blockchain vs. 1847 Holdings LLC | Argo Blockchain vs. Autonomix Medical, Common |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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