Correlation Between Argosy Minerals and Artemis Resources

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

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

Diversification Opportunities for Argosy Minerals and Artemis Resources

0.4

Correlation Coefficient

Argosy Minerals  Artemis Resources

Very weak diversification

The 3 months correlation between Argosy and Artemis is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Argosy Minerals Limited and Artemis Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artemis Resources and Argosy Minerals 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 Argosy Minerals Limited are associated (or correlated) with Artemis Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artemis Resources has no effect on the direction of Argosy Minerals i.e., Argosy Minerals and Artemis Resources go up and down completely randomly.

Pair Corralation between Argosy Minerals and Artemis Resources

Assuming the 90 days horizon Argosy Minerals Limited is expected to under-perform the Artemis Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Argosy Minerals Limited is 4.11 times less risky than Artemis Resources. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Artemis Resources is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  0.94  in Artemis Resources on September 2, 2024 and sell it today you would lose (0.44) from holding Artemis Resources or give up 46.81% of portfolio value over 90 days.

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

Argosy Minerals Limited  vs.  Artemis Resources

Argosy Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Argosy Minerals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Artemis Resources

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Artemis Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Artemis Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Argosy Minerals and Artemis Resources

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

The idea behind Argosy Minerals Limited and Artemis Resources 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.