Correlation Between Argo Investments and Mystate

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

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

Diversification Opportunities for Argo Investments and Mystate

0.49

Correlation Coefficient

Argo Investments  Mystate

Very weak diversification

The 3 months correlation between Argo and Mystate is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Argo Investments and Mystate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mystate and Argo Investments 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 Investments are associated (or correlated) with Mystate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mystate has no effect on the direction of Argo Investments i.e., Argo Investments and Mystate go up and down completely randomly.

Pair Corralation between Argo Investments and Mystate

Assuming the 90 days trading horizon Argo Investments is expected to generate 0.29 times more return on investment than Mystate. However, Argo Investments is 3.44 times less risky than Mystate. It trades about -0.06 of its potential returns per unit of risk. Mystate is currently generating about -0.13 per unit of risk. If you would invest  878.00  in Argo Investments on December 21, 2024 and sell it today you would lose (16.00) from holding Argo Investments or give up 1.82% of portfolio value over 90 days.

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

Argo Investments  vs.  Mystate

Argo Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Argo Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Argo Investments is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Mystate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mystate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Argo Investments and Mystate

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

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