Correlation Between Marvell Technology and Argo Gold
Can any of the company-specific risk be diversified away by investing in both Marvell Technology 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 Marvell Technology and Argo Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marvell Technology Group and Argo Gold, you can compare the effects of market volatilities on Marvell Technology 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 Marvell Technology with a short position of Argo Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvell Technology and Argo Gold.
Diversification Opportunities for Marvell Technology and Argo Gold
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marvell and Argo is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology Group and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold and Marvell Technology 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 Marvell Technology Group 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 Marvell Technology i.e., Marvell Technology and Argo Gold go up and down completely randomly.
Pair Corralation between Marvell Technology and Argo Gold
Given the investment horizon of 90 days Marvell Technology is expected to generate 1.35 times less return on investment than Argo Gold. But when comparing it to its historical volatility, Marvell Technology Group is 2.13 times less risky than Argo Gold. It trades about 0.08 of its potential returns per unit of risk. Argo Gold is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4.81 in Argo Gold on August 29, 2024 and sell it today you would earn a total of 0.93 from holding Argo Gold or generate 19.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marvell Technology Group vs. Argo Gold
Performance |
| Timeline |
| Marvell Technology |
| Argo Gold |
Marvell Technology and Argo Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvell Technology and Argo Gold
The main advantage of trading using opposite Marvell Technology and Argo Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvell Technology 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.| Marvell Technology vs. NVIDIA | Marvell Technology vs. Intel | Marvell Technology vs. Taiwan Semiconductor Manufacturing | Marvell Technology vs. Micron Technology |
| Argo Gold vs. Vertiv Holdings Co | Argo Gold vs. Nasdaq Inc | Argo Gold vs. McDonalds | Argo Gold vs. Walmart |
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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