Correlation Between Argo Blockchain and BitFrontier Capital

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

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

Diversification Opportunities for Argo Blockchain and BitFrontier Capital

0.4

Correlation Coefficient

Argo Blockchain  BitFrontier Capital

Very weak diversification

The 3 months correlation between Argo and BitFrontier is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Argo Blockchain PLC and BitFrontier Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFrontier Capital and Argo Blockchain 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 Argo Blockchain PLC are associated (or correlated) with BitFrontier Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFrontier Capital has no effect on the direction of Argo Blockchain i.e., Argo Blockchain and BitFrontier Capital go up and down completely randomly.

Pair Corralation between Argo Blockchain and BitFrontier Capital

Assuming the 90 days horizon Argo Blockchain PLC is expected to generate 0.83 times more return on investment than BitFrontier Capital. However, Argo Blockchain PLC is 1.2 times less risky than BitFrontier Capital. It trades about 0.01 of its potential returns per unit of risk. BitFrontier Capital Holdings is currently generating about -0.01 per unit of risk. If you would invest  5.30  in Argo Blockchain PLC on December 30, 2024 and sell it today you would lose (1.80) from holding Argo Blockchain PLC or give up 33.96% of portfolio value over 90 days.

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

Argo Blockchain PLC  vs.  BitFrontier Capital Holdings

Argo Blockchain PLC

Risk-Adjusted Performance

Very Weak

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

BitFrontier Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days BitFrontier Capital Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Argo Blockchain and BitFrontier Capital

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

The idea behind Argo Blockchain PLC and BitFrontier Capital Holdings 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.

Check out your portfolio center.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.