Correlation Between Argen X and Barco NV

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

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

Diversification Opportunities for Argen X and Barco NV

-0.79

Correlation Coefficient

Argen X  Barco NV

Pay attention - limited upside

The 3 months correlation between Argen and Barco is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Argen X and Barco NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barco NV and Argen X 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 Argen X are associated (or correlated) with Barco NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barco NV has no effect on the direction of Argen X i.e., Argen X and Barco NV go up and down completely randomly.

Pair Corralation between Argen X and Barco NV

Assuming the 90 days trading horizon Argen X is expected to under-perform the Barco NV. But the stock apears to be less risky and, when comparing its historical volatility, Argen X is 1.68 times less risky than Barco NV. The stock trades about -0.07 of its potential returns per unit of risk. The Barco NV is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,027  in Barco NV on December 30, 2024 and sell it today you would earn a total of  178.00  from holding Barco NV or generate 17.33% return on investment over 90 days.

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

Argen X  vs.  Barco NV

Argen X

Risk-Adjusted Performance

Very Weak

Over the last 90 days Argen X has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Barco NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Barco NV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Barco NV reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Argen X and Barco NV

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

The idea behind Argen X and Barco NV 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.