Correlation Between WT Microelectronics and Argosy Research

Can any of the company-specific risk be diversified away by investing in both WT Microelectronics and Argosy Research 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 Microelectronics and Argosy Research into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WT Microelectronics Co and Argosy Research, you can compare the effects of market volatilities on WT Microelectronics and Argosy Research 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 Microelectronics with a short position of Argosy Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of WT Microelectronics and Argosy Research.

Diversification Opportunities for WT Microelectronics and Argosy Research

0.23

Correlation Coefficient

WT Microelectronics  Argosy Research

Modest diversification

The 3 months correlation between 3036A and Argosy is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding WT Microelectronics Co and Argosy Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argosy Research and WT Microelectronics 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 Microelectronics Co are associated (or correlated) with Argosy Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argosy Research has no effect on the direction of WT Microelectronics i.e., WT Microelectronics and Argosy Research go up and down completely randomly.

Pair Corralation between WT Microelectronics and Argosy Research

Assuming the 90 days trading horizon WT Microelectronics is expected to generate 1.4 times less return on investment than Argosy Research. But when comparing it to its historical volatility, WT Microelectronics Co is 12.44 times less risky than Argosy Research. It trades about 0.4 of its potential returns per unit of risk. Argosy Research is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  15,800  in Argosy Research on October 10, 2024 and sell it today you would earn a total of  150.00  from holding Argosy Research or generate 0.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

WT Microelectronics Co  vs.  Argosy Research

WT Microelectronics

Risk-Adjusted Performance

38 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in WT Microelectronics Co are ranked lower than 38 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, WT Microelectronics is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Argosy Research

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Argosy Research are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Argosy Research may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with WT Microelectronics and Argosy Research

The main advantage of trading using opposite WT Microelectronics and Argosy Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WT Microelectronics position performs unexpectedly, Argosy Research 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 Argosy Research will offset losses from the drop in Argosy Research's long position.

The idea behind WT Microelectronics Co and Argosy Research 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.