Correlation Between Lavras Gold and Argo Gold
Can any of the company-specific risk be diversified away by investing in both Lavras Gold 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 Lavras Gold and Argo Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lavras Gold Corp and Argo Gold, you can compare the effects of market volatilities on Lavras Gold 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 Lavras Gold with a short position of Argo Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lavras Gold and Argo Gold.
Diversification Opportunities for Lavras Gold and Argo Gold
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lavras and Argo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lavras Gold Corp and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold and Lavras Gold 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 Lavras Gold Corp 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 Lavras Gold i.e., Lavras Gold and Argo Gold go up and down completely randomly.
Pair Corralation between Lavras Gold and Argo Gold
Assuming the 90 days horizon Lavras Gold is expected to generate 2.29 times less return on investment than Argo Gold. In addition to that, Lavras Gold is 1.74 times more volatile than Argo Gold. It trades about 0.04 of its total potential returns per unit of risk. Argo Gold is currently generating about 0.17 per unit of volatility. If you would invest 5.27 in Argo Gold on November 3, 2024 and sell it today you would earn a total of 0.68 from holding Argo Gold or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lavras Gold Corp vs. Argo Gold
Performance |
| Timeline |
| Lavras Gold Corp |
| Argo Gold |
Lavras Gold and Argo Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lavras Gold and Argo Gold
The main advantage of trading using opposite Lavras Gold and Argo Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lavras Gold 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.| Lavras Gold vs. TRU Precious Metals | Lavras Gold vs. Orefinders Resources | Lavras Gold vs. North Peak Resources | Lavras Gold vs. Nine Mile Metals |
| Argo Gold vs. Blue Star Gold | Argo Gold vs. Angkor Resources Corp | Argo Gold vs. Advance Gold Corp | Argo Gold vs. Advance United Holdings |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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