Correlation Between Stelar Metals and Argo Investments
Can any of the company-specific risk be diversified away by investing in both Stelar Metals 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 Stelar Metals and Argo Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Argo Investments, you can compare the effects of market volatilities on Stelar Metals 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 Stelar Metals with a short position of Argo Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Argo Investments.
Diversification Opportunities for Stelar Metals and Argo Investments
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stelar and Argo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Argo Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Investments and Stelar Metals 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 Stelar Metals 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 Stelar Metals i.e., Stelar Metals and Argo Investments go up and down completely randomly.
Pair Corralation between Stelar Metals and Argo Investments
Assuming the 90 days trading horizon Stelar Metals is expected to under-perform the Argo Investments. In addition to that, Stelar Metals is 6.27 times more volatile than Argo Investments. It trades about -0.29 of its total potential returns per unit of risk. Argo Investments is currently generating about 0.24 per unit of volatility. If you would invest 884.00 in Argo Investments on August 30, 2024 and sell it today you would earn a total of 24.00 from holding Argo Investments or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Stelar Metals vs. Argo Investments
Performance |
| Timeline |
| Stelar Metals |
| Argo Investments |
Stelar Metals and Argo Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Argo Investments
The main advantage of trading using opposite Stelar Metals and Argo Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals 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.| Stelar Metals vs. Northern Star Resources | Stelar Metals vs. Evolution Mining | Stelar Metals vs. Bluescope Steel | Stelar Metals vs. Sandfire Resources NL |
| Argo Investments vs. MotorCycle Holdings | Argo Investments vs. Ramsay Health Care | Argo Investments vs. Fisher Paykel Healthcare | Argo Investments vs. M3 Mining |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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