Correlation Between Argo Blockchain and Fossil Group

Can any of the company-specific risk be diversified away by investing in both Argo Blockchain and Fossil 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 Argo Blockchain and Fossil Group 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 Fossil Group 7, you can compare the effects of market volatilities on Argo Blockchain and Fossil 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 Argo Blockchain with a short position of Fossil Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Blockchain and Fossil Group.

Diversification Opportunities for Argo Blockchain and Fossil Group

-0.34

Correlation Coefficient

Argo Blockchain  Fossil Group

Very good diversification

The 3 months correlation between Argo and Fossil is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Argo Blockchain plc and Fossil Group 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fossil Group 7 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 Fossil Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fossil Group 7 has no effect on the direction of Argo Blockchain i.e., Argo Blockchain and Fossil Group go up and down completely randomly.

Pair Corralation between Argo Blockchain and Fossil Group

Assuming the 90 days horizon Argo Blockchain plc is expected to under-perform the Fossil Group. In addition to that, Argo Blockchain is 2.4 times more volatile than Fossil Group 7. It trades about -0.02 of its total potential returns per unit of risk. Fossil Group 7 is currently generating about 0.08 per unit of volatility. If you would invest  1,362  in Fossil Group 7 on October 16, 2024 and sell it today you would earn a total of  78.00  from holding Fossil Group 7 or generate 5.73% return on investment over 90 days.

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

Argo Blockchain plc  vs.  Fossil Group 7

Argo Blockchain plc

Risk-Adjusted Performance

0 of 100

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 quite persistent forward-looking signals, Argo Blockchain is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Fossil Group 7

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fossil Group 7 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Fossil Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Argo Blockchain and Fossil Group

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

The idea behind Argo Blockchain plc and Fossil Group 7 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..