Correlation Between Argosy Research and Southeast Cement

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

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

Diversification Opportunities for Argosy Research and Southeast Cement

-0.12

Correlation Coefficient

Argosy Research  Southeast Cement

Good diversification

The 3 months correlation between Argosy and Southeast is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Argosy Research and Southeast Cement Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southeast Cement and Argosy Research 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 Argosy Research are associated (or correlated) with Southeast Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southeast Cement has no effect on the direction of Argosy Research i.e., Argosy Research and Southeast Cement go up and down completely randomly.

Pair Corralation between Argosy Research and Southeast Cement

Assuming the 90 days trading horizon Argosy Research is expected to generate 1.8 times more return on investment than Southeast Cement. However, Argosy Research is 1.8 times more volatile than Southeast Cement Co. It trades about -0.05 of its potential returns per unit of risk. Southeast Cement Co is currently generating about -0.19 per unit of risk. If you would invest  15,150  in Argosy Research on October 16, 2024 and sell it today you would lose (1,150) from holding Argosy Research or give up 7.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Argosy Research  vs.  Southeast Cement Co

Argosy Research

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Argosy Research has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Southeast Cement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Southeast Cement Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Argosy Research and Southeast Cement

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

The idea behind Argosy Research and Southeast Cement Co 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.