Correlation Between Argo Investments and Nine Entertainment

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Can any of the company-specific risk be diversified away by investing in both Argo Investments and Nine Entertainment 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 Nine Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Investments and Nine Entertainment Co, you can compare the effects of market volatilities on Argo Investments and Nine Entertainment 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 Nine Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Investments and Nine Entertainment.

Diversification Opportunities for Argo Investments and Nine Entertainment

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Argo and Nine is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Argo Investments and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment 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 Nine Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Entertainment has no effect on the direction of Argo Investments i.e., Argo Investments and Nine Entertainment go up and down completely randomly.

Pair Corralation between Argo Investments and Nine Entertainment

Assuming the 90 days trading horizon Argo Investments is expected to generate 0.88 times more return on investment than Nine Entertainment. However, Argo Investments is 1.13 times less risky than Nine Entertainment. It trades about -0.14 of its potential returns per unit of risk. Nine Entertainment Co is currently generating about -0.2 per unit of risk. If you would invest  920.00  in Argo Investments on October 9, 2024 and sell it today you would lose (18.00) from holding Argo Investments or give up 1.96% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Argo Investments  vs.  Nine Entertainment Co

 Performance 
       Timeline  
Argo Investments 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Argo Investments are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.
Nine Entertainment 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Nine Entertainment Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Nine Entertainment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Argo Investments and Nine Entertainment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Argo Investments and Nine Entertainment

The main advantage of trading using opposite Argo Investments and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Investments position performs unexpectedly, Nine Entertainment 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 Nine Entertainment will offset losses from the drop in Nine Entertainment's long position.
The idea behind Argo Investments and Nine Entertainment Co 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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