Correlation Between CAP LEASE and Argo Group
Can any of the company-specific risk be diversified away by investing in both CAP LEASE 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 CAP LEASE and Argo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAP LEASE AVIATION and Argo Group Limited, you can compare the effects of market volatilities on CAP LEASE 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 CAP LEASE with a short position of Argo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and Argo Group.
Diversification Opportunities for CAP LEASE and Argo Group
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CAP and Argo is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and Argo Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Group Limited and CAP LEASE 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 CAP LEASE AVIATION 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 Limited has no effect on the direction of CAP LEASE i.e., CAP LEASE and Argo Group go up and down completely randomly.
Pair Corralation between CAP LEASE and Argo Group
Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to under-perform the Argo Group. But the stock apears to be less risky and, when comparing its historical volatility, CAP LEASE AVIATION is 1.14 times less risky than Argo Group. The stock trades about -0.14 of its potential returns per unit of risk. The Argo Group Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Argo Group Limited on September 15, 2024 and sell it today you would earn a total of 0.00 from holding Argo Group Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. Argo Group Limited
Performance |
| Timeline |
| CAP LEASE AVIATION |
| Argo Group Limited |
CAP LEASE and Argo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and Argo Group
The main advantage of trading using opposite CAP LEASE and Argo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE 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.| CAP LEASE vs. Givaudan SA | CAP LEASE vs. Antofagasta PLC | CAP LEASE vs. Ferrexpo PLC | CAP LEASE vs. Atalaya Mining |
| Argo Group vs. Catalyst Media Group | Argo Group vs. CATLIN GROUP | Argo Group vs. Tamburi Investment Partners | Argo Group vs. Magnora ASA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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