Correlation Between Wt Financial and Argo Investments
Can any of the company-specific risk be diversified away by investing in both Wt Financial 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 Wt Financial and Argo Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wt Financial Group and Argo Investments, you can compare the effects of market volatilities on Wt Financial 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 Wt Financial with a short position of Argo Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wt Financial and Argo Investments.
Diversification Opportunities for Wt Financial and Argo Investments
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WTL and Argo is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Wt Financial Group and Argo Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Investments and Wt Financial 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 Wt Financial Group 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 Wt Financial i.e., Wt Financial and Argo Investments go up and down completely randomly.
Pair Corralation between Wt Financial and Argo Investments
Assuming the 90 days trading horizon Wt Financial Group is expected to under-perform the Argo Investments. In addition to that, Wt Financial is 4.72 times more volatile than Argo Investments. It trades about -0.09 of its total potential returns per unit of risk. Argo Investments is currently generating about 0.34 per unit of volatility. If you would invest 876.00 in Argo Investments on September 2, 2024 and sell it today you would earn a total of 38.00 from holding Argo Investments or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wt Financial Group vs. Argo Investments
Performance |
| Timeline |
| Wt Financial Group |
| Argo Investments |
Wt Financial and Argo Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wt Financial and Argo Investments
The main advantage of trading using opposite Wt Financial and Argo Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wt Financial 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.| Wt Financial vs. WA1 Resources | Wt Financial vs. Predictive Discovery | Wt Financial vs. Cooper Metals | Wt Financial vs. OD6 Metals |
| Argo Investments vs. WA1 Resources | Argo Investments vs. Predictive Discovery | Argo Investments vs. Cooper Metals | Argo Investments vs. OD6 Metals |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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