Correlation Between Angkor Resources and Argo Gold

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

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

Diversification Opportunities for Angkor Resources and Argo Gold

0.21

Correlation Coefficient

Angkor Resources  Argo Gold

Modest diversification

The 3 months correlation between Angkor and Argo is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Angkor Resources Corp and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold and Angkor Resources 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 Angkor Resources Corp 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 Angkor Resources i.e., Angkor Resources and Argo Gold go up and down completely randomly.

Pair Corralation between Angkor Resources and Argo Gold

Assuming the 90 days horizon Angkor Resources is expected to generate 1.02 times less return on investment than Argo Gold. But when comparing it to its historical volatility, Angkor Resources Corp is 1.1 times less risky than Argo Gold. It trades about 0.13 of its potential returns per unit of risk. Argo Gold is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  4.50  in Argo Gold on November 20, 2024 and sell it today you would earn a total of  2.00  from holding Argo Gold or generate 44.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Angkor Resources Corp  vs.  Argo Gold

Angkor Resources Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Angkor Resources Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Angkor Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Argo Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Argo Gold are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Argo Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Angkor Resources and Argo Gold

The main advantage of trading using opposite Angkor Resources and Argo Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angkor Resources 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 Angkor Resources Corp 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.