Correlation Between Antilles Gold and Argo Gold

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

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

Diversification Opportunities for Antilles Gold and Argo Gold

0.04

Correlation Coefficient

Antilles Gold  Argo Gold

Significant diversification

The 3 months correlation between Antilles and Argo is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Antilles Gold Limited and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold and Antilles Gold 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 Antilles Gold Limited 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 Antilles Gold i.e., Antilles Gold and Argo Gold go up and down completely randomly.

Pair Corralation between Antilles Gold and Argo Gold

Assuming the 90 days horizon Antilles Gold Limited is expected to generate 7.9 times more return on investment than Argo Gold. However, Antilles Gold is 7.9 times more volatile than Argo Gold. It trades about 0.08 of its potential returns per unit of risk. Argo Gold is currently generating about 0.03 per unit of risk. If you would invest  5.79  in Antilles Gold Limited on September 4, 2024 and sell it today you would lose (5.51) from holding Antilles Gold Limited or give up 95.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Antilles Gold Limited  vs.  Argo Gold

Antilles Gold Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Antilles Gold Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak primary indicators, Antilles Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Argo Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Argo Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Argo Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Antilles Gold and Argo Gold

The main advantage of trading using opposite Antilles Gold and Argo Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antilles Gold 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 Antilles Gold Limited 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.