Correlation Between Argan and Api Group

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

By analyzing existing cross correlation between Argan Inc and Api Group Corp, you can compare the effects of market volatilities on Argan and Api 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 Argan with a short position of Api Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argan and Api Group.

Diversification Opportunities for Argan and Api Group

0.14

Correlation Coefficient

Argan  Api Group

Average diversification

The 3 months correlation between Argan and Api is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Argan Inc and Api Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Api Group Corp and Argan 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 Argan Inc are associated (or correlated) with Api Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Api Group Corp has no effect on the direction of Argan i.e., Argan and Api Group go up and down completely randomly.

Pair Corralation between Argan and Api Group

Considering the 90-day investment horizon Argan Inc is expected to under-perform the Api Group. In addition to that, Argan is 2.45 times more volatile than Api Group Corp. It trades about -0.04 of its total potential returns per unit of risk. Api Group Corp is currently generating about 0.01 per unit of volatility. If you would invest  3,651  in Api Group Corp on December 26, 2024 and sell it today you would earn a total of  22.00  from holding Api Group Corp or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Argan Inc  vs.  Api Group Corp

Argan Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Argan Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Api Group Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Api Group Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Api Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Argan and Api Group

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

The idea behind Argan Inc and Api Group Corp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.