Correlation Between OFX Group and Argo Blockchain
Can any of the company-specific risk be diversified away by investing in both OFX Group and Argo Blockchain 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 OFX Group and Argo Blockchain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OFX Group Ltd and Argo Blockchain PLC, you can compare the effects of market volatilities on OFX Group and Argo Blockchain 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 OFX Group with a short position of Argo Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFX Group and Argo Blockchain.
Diversification Opportunities for OFX Group and Argo Blockchain
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between OFX and Argo is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding OFX Group Ltd and Argo Blockchain PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Blockchain PLC and OFX Group 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 OFX Group Ltd are associated (or correlated) with Argo Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Blockchain PLC has no effect on the direction of OFX Group i.e., OFX Group and Argo Blockchain go up and down completely randomly.
Pair Corralation between OFX Group and Argo Blockchain
Assuming the 90 days horizon OFX Group is expected to generate 4.7 times less return on investment than Argo Blockchain. But when comparing it to its historical volatility, OFX Group Ltd is 2.06 times less risky than Argo Blockchain. It trades about 0.02 of its potential returns per unit of risk. Argo Blockchain PLC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 116.00 in Argo Blockchain PLC on September 1, 2024 and sell it today you would lose (4.00) from holding Argo Blockchain PLC or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OFX Group Ltd vs. Argo Blockchain PLC
Performance |
| Timeline |
| OFX Group |
| Argo Blockchain PLC |
OFX Group and Argo Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OFX Group and Argo Blockchain
The main advantage of trading using opposite OFX Group and Argo Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFX Group position performs unexpectedly, Argo Blockchain 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 Blockchain will offset losses from the drop in Argo Blockchain's long position.| OFX Group vs. Anheuser Busch Inbev | OFX Group vs. Willamette Valley Vineyards | OFX Group vs. Ambev SA ADR | OFX Group vs. Fomento Economico Mexicano |
| Argo Blockchain vs. Visa Class A | Argo Blockchain vs. Diamond Hill Investment | Argo Blockchain vs. Distoken Acquisition | Argo Blockchain vs. Associated Capital Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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