Correlation Between PPHE Hotel and Argo Group
Can any of the company-specific risk be diversified away by investing in both PPHE Hotel and Argo Group 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 PPHE Hotel and Argo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE Hotel Group and Argo Group Limited, you can compare the effects of market volatilities on PPHE Hotel and Argo Group 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 PPHE Hotel with a short position of Argo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE Hotel and Argo Group.
Diversification Opportunities for PPHE Hotel and Argo Group
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between PPHE and Argo is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding PPHE Hotel Group and Argo Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Group Limited and PPHE Hotel 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 PPHE Hotel Group are associated (or correlated) with Argo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Group Limited has no effect on the direction of PPHE Hotel i.e., PPHE Hotel and Argo Group go up and down completely randomly.
Pair Corralation between PPHE Hotel and Argo Group
Assuming the 90 days trading horizon PPHE Hotel is expected to generate 8.12 times less return on investment than Argo Group. But when comparing it to its historical volatility, PPHE Hotel Group is 3.2 times less risky than Argo Group. It trades about 0.07 of its potential returns per unit of risk. Argo Group Limited is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 450.00 in Argo Group Limited on November 27, 2024 and sell it today you would earn a total of 75.00 from holding Argo Group Limited or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE Hotel Group vs. Argo Group Limited
Performance |
| Timeline |
| PPHE Hotel Group |
| Argo Group Limited |
PPHE Hotel and Argo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE Hotel and Argo Group
The main advantage of trading using opposite PPHE Hotel and Argo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE Hotel position performs unexpectedly, Argo Group 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 Group will offset losses from the drop in Argo Group's long position.| PPHE Hotel vs. EVS Broadcast Equipment | PPHE Hotel vs. JB Hunt Transport | PPHE Hotel vs. Roadside Real Estate | PPHE Hotel vs. Morgan Advanced Materials |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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