Correlation Between Premier Investments and Argo Investments
Can any of the company-specific risk be diversified away by investing in both Premier Investments and Argo Investments 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 Premier Investments and Argo Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Investments and Argo Investments, you can compare the effects of market volatilities on Premier Investments and Argo Investments 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 Premier Investments with a short position of Argo Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Investments and Argo Investments.
Diversification Opportunities for Premier Investments and Argo Investments
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Premier and Argo is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Premier Investments and Argo Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Investments and Premier Investments 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 Premier Investments are associated (or correlated) with Argo Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Investments has no effect on the direction of Premier Investments i.e., Premier Investments and Argo Investments go up and down completely randomly.
Pair Corralation between Premier Investments and Argo Investments
Assuming the 90 days trading horizon Premier Investments is expected to generate 3.17 times more return on investment than Argo Investments. However, Premier Investments is 3.17 times more volatile than Argo Investments. It trades about 0.09 of its potential returns per unit of risk. Argo Investments is currently generating about 0.1 per unit of risk. If you would invest 2,846 in Premier Investments on September 3, 2024 and sell it today you would earn a total of 639.00 from holding Premier Investments or generate 22.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier Investments vs. Argo Investments
Performance |
| Timeline |
| Premier Investments |
| Argo Investments |
Premier Investments and Argo Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Investments and Argo Investments
The main advantage of trading using opposite Premier Investments and Argo Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Investments position performs unexpectedly, Argo Investments 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 Investments will offset losses from the drop in Argo Investments' long position.| Premier Investments vs. Westpac Banking | Premier Investments vs. Champion Iron | Premier Investments vs. iShares Global Healthcare | Premier Investments vs. Peel Mining |
| Argo Investments vs. Queste Communications | Argo Investments vs. Diversified United Investment | Argo Investments vs. Dexus Convenience Retail | Argo Investments vs. Super Retail 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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