Correlation Between Puma Exploration and Argo Gold
Can any of the company-specific risk be diversified away by investing in both Puma Exploration 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 Puma Exploration and Argo Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puma Exploration and Argo Gold, you can compare the effects of market volatilities on Puma Exploration 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 Puma Exploration with a short position of Argo Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puma Exploration and Argo Gold.
Diversification Opportunities for Puma Exploration and Argo Gold
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Puma and Argo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Puma Exploration and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold and Puma Exploration 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 Puma Exploration 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 Puma Exploration i.e., Puma Exploration and Argo Gold go up and down completely randomly.
Pair Corralation between Puma Exploration and Argo Gold
Assuming the 90 days horizon Puma Exploration is expected to generate 0.68 times more return on investment than Argo Gold. However, Puma Exploration is 1.48 times less risky than Argo Gold. It trades about 0.02 of its potential returns per unit of risk. Argo Gold is currently generating about 0.01 per unit of risk. If you would invest 6.00 in Puma Exploration on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Puma Exploration or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Puma Exploration vs. Argo Gold
Performance |
| Timeline |
| Puma Exploration |
| Argo Gold |
Puma Exploration and Argo Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puma Exploration and Argo Gold
The main advantage of trading using opposite Puma Exploration and Argo Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puma Exploration 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.| Puma Exploration vs. Aurion Resources | Puma Exploration vs. Rio2 Limited | Puma Exploration vs. Palamina Corp | Puma Exploration vs. BTU Metals Corp |
| Argo Gold vs. Blue Star Gold | Argo Gold vs. Angkor Resources Corp | Argo Gold vs. Advance Gold Corp | Argo Gold vs. Advance United Holdings |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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