Correlation Between Snowflake and Argo Gold
Can any of the company-specific risk be diversified away by investing in both Snowflake 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 Snowflake and Argo Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snowflake and Argo Gold, you can compare the effects of market volatilities on Snowflake 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 Snowflake with a short position of Argo Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snowflake and Argo Gold.
Diversification Opportunities for Snowflake and Argo Gold
Excellent diversification
The 3 months correlation between Snowflake and Argo is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Snowflake and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold and Snowflake 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 Snowflake 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 Snowflake i.e., Snowflake and Argo Gold go up and down completely randomly.
Pair Corralation between Snowflake and Argo Gold
Given the investment horizon of 90 days Snowflake is expected to generate 1.37 times less return on investment than Argo Gold. But when comparing it to its historical volatility, Snowflake is 1.73 times less risky than Argo Gold. It trades about 0.07 of its potential returns per unit of risk. Argo Gold is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4.81 in Argo Gold on August 29, 2024 and sell it today you would earn a total of 0.93 from holding Argo Gold or generate 19.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snowflake vs. Argo Gold
Performance |
| Timeline |
| Snowflake |
| Argo Gold |
Snowflake and Argo Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snowflake and Argo Gold
The main advantage of trading using opposite Snowflake and Argo Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snowflake 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.The idea behind Snowflake and Argo Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Argo Gold vs. Vertiv Holdings Co | Argo Gold vs. Nasdaq Inc | Argo Gold vs. McDonalds | Argo Gold vs. Walmart |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |