Correlation Between Vital Energy and Argo Group
Can any of the company-specific risk be diversified away by investing in both Vital Energy 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 Vital Energy and Argo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vital Energy and Argo Group 65, you can compare the effects of market volatilities on Vital Energy 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 Vital Energy with a short position of Argo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vital Energy and Argo Group.
Diversification Opportunities for Vital Energy and Argo Group
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vital and Argo is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Vital Energy and Argo Group 65 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Group 65 and Vital Energy 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 Vital Energy 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 65 has no effect on the direction of Vital Energy i.e., Vital Energy and Argo Group go up and down completely randomly.
Pair Corralation between Vital Energy and Argo Group
Given the investment horizon of 90 days Vital Energy is expected to generate 1.44 times less return on investment than Argo Group. In addition to that, Vital Energy is 5.24 times more volatile than Argo Group 65. It trades about 0.01 of its total potential returns per unit of risk. Argo Group 65 is currently generating about 0.06 per unit of volatility. If you would invest 2,154 in Argo Group 65 on September 2, 2024 and sell it today you would earn a total of 54.00 from holding Argo Group 65 or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vital Energy vs. Argo Group 65
Performance |
| Timeline |
| Vital Energy |
| Argo Group 65 |
Vital Energy and Argo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vital Energy and Argo Group
The main advantage of trading using opposite Vital Energy and Argo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vital Energy 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.| Vital Energy vs. SM Energy Co | Vital Energy vs. Permian Resources | Vital Energy vs. Matador Resources | Vital Energy vs. Obsidian Energy |
| Argo Group vs. Brighthouse Financial | Argo Group vs. American Financial Group | Argo Group vs. CMS Energy Corp | Argo Group vs. Aegon Funding |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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