Correlation Between Ford and Argosy Minerals

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

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

Diversification Opportunities for Ford and Argosy Minerals

0.52

Correlation Coefficient

Ford  Argosy Minerals

Very weak diversification

The 3 months correlation between Ford and Argosy is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Argosy Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argosy Minerals and Ford 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 Ford Motor are associated (or correlated) with Argosy Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argosy Minerals has no effect on the direction of Ford i.e., Ford and Argosy Minerals go up and down completely randomly.

Pair Corralation between Ford and Argosy Minerals

Taking into account the 90-day investment horizon Ford is expected to generate 4.15 times less return on investment than Argosy Minerals. But when comparing it to its historical volatility, Ford Motor is 2.7 times less risky than Argosy Minerals. It trades about 0.13 of its potential returns per unit of risk. Argosy Minerals is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  2.70  in Argosy Minerals on October 22, 2024 and sell it today you would earn a total of  0.30  from holding Argosy Minerals or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Ford Motor  vs.  Argosy Minerals

Ford Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Ford is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Argosy Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Argosy Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Ford and Argosy Minerals

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

The idea behind Ford Motor and Argosy Minerals 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.