Correlation Between Bitcoin Well and Argo Blockchain

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

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

Diversification Opportunities for Bitcoin Well and Argo Blockchain

0.69

Correlation Coefficient

Bitcoin Well  Argo Blockchain

Poor diversification

The 3 months correlation between Bitcoin and Argo is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Well and Argo Blockchain PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Blockchain PLC and Bitcoin Well 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 Bitcoin Well are associated (or correlated) with Argo Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Blockchain PLC has no effect on the direction of Bitcoin Well i.e., Bitcoin Well and Argo Blockchain go up and down completely randomly.

Pair Corralation between Bitcoin Well and Argo Blockchain

Assuming the 90 days horizon Bitcoin Well is expected to generate 1.66 times more return on investment than Argo Blockchain. However, Bitcoin Well is 1.66 times more volatile than Argo Blockchain PLC. It trades about 0.01 of its potential returns per unit of risk. Argo Blockchain PLC is currently generating about -0.1 per unit of risk. If you would invest  12.00  in Bitcoin Well on December 28, 2024 and sell it today you would lose (2.55) from holding Bitcoin Well or give up 21.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Bitcoin Well  vs.  Argo Blockchain PLC

Bitcoin Well

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Well are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Bitcoin Well may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Argo Blockchain PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Argo Blockchain PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Bitcoin Well and Argo Blockchain

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

The idea behind Bitcoin Well and Argo Blockchain PLC 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..