Correlation Between JNC Resources and Argo Gold
Can any of the company-specific risk be diversified away by investing in both JNC Resources and Argo 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 JNC Resources and Argo Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JNC Resources and Argo Gold, you can compare the effects of market volatilities on JNC Resources and Argo 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 JNC Resources with a short position of Argo Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of JNC Resources and Argo Gold.
Diversification Opportunities for JNC Resources and Argo Gold
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JNC and Argo is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding JNC Resources and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold and JNC Resources 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 JNC Resources are associated (or correlated) with Argo Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Gold has no effect on the direction of JNC Resources i.e., JNC Resources and Argo Gold go up and down completely randomly.
Pair Corralation between JNC Resources and Argo Gold
Assuming the 90 days horizon JNC Resources is expected to generate 3.53 times more return on investment than Argo Gold. However, JNC Resources is 3.53 times more volatile than Argo Gold. It trades about 0.11 of its potential returns per unit of risk. Argo Gold is currently generating about 0.03 per unit of risk. If you would invest 1.10 in JNC Resources on September 12, 2024 and sell it today you would earn a total of 0.60 from holding JNC Resources or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JNC Resources vs. Argo Gold
Performance |
| Timeline |
| JNC Resources |
| Argo Gold |
JNC Resources and Argo Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JNC Resources and Argo Gold
The main advantage of trading using opposite JNC Resources and Argo Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JNC Resources position performs unexpectedly, Argo 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 Argo Gold will offset losses from the drop in Argo Gold's long position.| JNC Resources vs. Revival Gold | JNC Resources vs. Galiano Gold | JNC Resources vs. US Gold Corp | JNC Resources vs. HUMANA INC |
| Argo Gold vs. Revival Gold | Argo Gold vs. Galiano Gold | Argo Gold vs. US Gold Corp | Argo Gold vs. HUMANA INC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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