Correlation Between Loop Industries and Argent Mid
Can any of the company-specific risk be diversified away by investing in both Loop Industries and Argent Mid 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 Loop Industries and Argent Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loop Industries and Argent Mid Cap, you can compare the effects of market volatilities on Loop Industries and Argent Mid 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 Loop Industries with a short position of Argent Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loop Industries and Argent Mid.
Diversification Opportunities for Loop Industries and Argent Mid
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Loop and Argent is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Loop Industries and Argent Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argent Mid Cap and Loop Industries 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 Loop Industries are associated (or correlated) with Argent Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argent Mid Cap has no effect on the direction of Loop Industries i.e., Loop Industries and Argent Mid go up and down completely randomly.
Pair Corralation between Loop Industries and Argent Mid
Given the investment horizon of 90 days Loop Industries is expected to generate 3.69 times more return on investment than Argent Mid. However, Loop Industries is 3.69 times more volatile than Argent Mid Cap. It trades about 0.1 of its potential returns per unit of risk. Argent Mid Cap is currently generating about 0.23 per unit of risk. If you would invest 131.00 in Loop Industries on August 26, 2024 and sell it today you would earn a total of 10.00 from holding Loop Industries or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loop Industries vs. Argent Mid Cap
Performance |
| Timeline |
| Loop Industries |
| Argent Mid Cap |
Loop Industries and Argent Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loop Industries and Argent Mid
The main advantage of trading using opposite Loop Industries and Argent Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loop Industries position performs unexpectedly, Argent Mid 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 Argent Mid will offset losses from the drop in Argent Mid's long position.| Loop Industries vs. H B Fuller | Loop Industries vs. Element Solutions | Loop Industries vs. Innospec | Loop Industries vs. Cabot |
| Argent Mid vs. Vanguard Mid Cap Index | Argent Mid vs. Vanguard Extended Market | Argent Mid vs. iShares Core SP | Argent Mid vs. SPDR SP MIDCAP |
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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