Correlation Between Ford and Argonaut Gold
Can any of the company-specific risk be diversified away by investing in both Ford and Argonaut Gold 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 Ford and Argonaut Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Argonaut Gold, you can compare the effects of market volatilities on Ford and Argonaut Gold 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 Ford with a short position of Argonaut Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Argonaut Gold.
Diversification Opportunities for Ford and Argonaut Gold
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ford and Argonaut is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Argonaut Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argonaut Gold and Ford 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 Ford Motor are associated (or correlated) with Argonaut Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argonaut Gold has no effect on the direction of Ford i.e., Ford and Argonaut Gold go up and down completely randomly.
Pair Corralation between Ford and Argonaut Gold
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Argonaut Gold. In addition to that, Ford is 1.03 times more volatile than Argonaut Gold. It trades about -0.01 of its total potential returns per unit of risk. Argonaut Gold is currently generating about 0.16 per unit of volatility. If you would invest 33.00 in Argonaut Gold on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Argonaut Gold or generate 12.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 25.4% |
| Values | Daily Returns |
Ford Motor vs. Argonaut Gold
Performance |
| Timeline |
| Ford Motor |
| Argonaut Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Argonaut Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Argonaut Gold
The main advantage of trading using opposite Ford and Argonaut Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Argonaut Gold 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 Argonaut Gold will offset losses from the drop in Argonaut Gold's long position.The idea behind Ford Motor and Argonaut Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Argonaut Gold vs. Aurion Resources | Argonaut Gold vs. Rio2 Limited | Argonaut Gold vs. Minera Alamos | Argonaut Gold vs. Liberty Gold Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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