Correlation Between Argent and Allied Electronics

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

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

Diversification Opportunities for Argent and Allied Electronics

0.0

Correlation Coefficient

Argent  Allied Electronics

Pay attention - limited upside

The 3 months correlation between Argent and Allied is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Argent and Allied Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Electronics and Argent 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 Argent are associated (or correlated) with Allied Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Electronics has no effect on the direction of Argent i.e., Argent and Allied Electronics go up and down completely randomly.

Pair Corralation between Argent and Allied Electronics

If you would invest  0.00  in Argent on December 28, 2024 and sell it today you would earn a total of  0.00  from holding Argent or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Argent  vs.  Allied Electronics

Argent

Risk-Adjusted Performance

Very Weak

Over the last 90 days Argent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Argent is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Allied Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allied Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Allied Electronics is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Argent and Allied Electronics

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

The idea behind Argent and Allied Electronics 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .