Correlation Between Argent and Sabvest Capital

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

By analyzing existing cross correlation between Argent and Sabvest Capital, you can compare the effects of market volatilities on Argent and Sabvest Capital 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 Sabvest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argent and Sabvest Capital.

Diversification Opportunities for Argent and Sabvest Capital

0.75

Correlation Coefficient

Argent  Sabvest Capital

Poor diversification

The 3 months correlation between Argent and Sabvest is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Argent and Sabvest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabvest Capital 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 Sabvest Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabvest Capital has no effect on the direction of Argent i.e., Argent and Sabvest Capital go up and down completely randomly.

Pair Corralation between Argent and Sabvest Capital

Assuming the 90 days trading horizon Argent is expected to generate 3.15 times less return on investment than Sabvest Capital. But when comparing it to its historical volatility, Argent is 1.77 times less risky than Sabvest Capital. It trades about 0.06 of its potential returns per unit of risk. Sabvest Capital is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  745,000  in Sabvest Capital on September 15, 2024 and sell it today you would earn a total of  125,000  from holding Sabvest Capital or generate 16.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Argent  vs.  Sabvest Capital

Argent

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Argent are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Argent is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Sabvest Capital

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sabvest Capital are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sabvest Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Argent and Sabvest Capital

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

The idea behind Argent and Sabvest Capital 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.