Correlation Between AMPL and Argo Gold

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

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

Diversification Opportunities for AMPL and Argo Gold

-0.05

Correlation Coefficient

AMPL  Argo Gold

Good diversification

The 3 months correlation between AMPL and Argo is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding AMPL and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold and AMPL 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 AMPL are associated (or correlated) with Argo Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Gold has no effect on the direction of AMPL i.e., AMPL and Argo Gold go up and down completely randomly.

Pair Corralation between AMPL and Argo Gold

Assuming the 90 days trading horizon AMPL is expected to under-perform the Argo Gold. In addition to that, AMPL is 1.68 times more volatile than Argo Gold. It trades about -0.01 of its total potential returns per unit of risk. Argo Gold is currently generating about 0.1 per unit of volatility. If you would invest  5.60  in Argo Gold on December 30, 2024 and sell it today you would earn a total of  1.13  from holding Argo Gold or generate 20.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

AMPL  vs.  Argo Gold

AMPL

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMPL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, AMPL is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Argo Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Argo Gold are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Argo Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMPL and Argo Gold

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

The idea behind AMPL and Argo Gold 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.