Correlation Between Fobi AI and Argentum

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

By analyzing existing cross correlation between Fobi AI and Argentum 47, you can compare the effects of market volatilities on Fobi AI and Argentum 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 Fobi AI with a short position of Argentum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fobi AI and Argentum.

Diversification Opportunities for Fobi AI and Argentum

0.01

Correlation Coefficient

Fobi AI  Argentum

Significant diversification

The 3 months correlation between Fobi and Argentum is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fobi AI and Argentum 47 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argentum 47 and Fobi AI 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 Fobi AI are associated (or correlated) with Argentum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argentum 47 has no effect on the direction of Fobi AI i.e., Fobi AI and Argentum go up and down completely randomly.

Pair Corralation between Fobi AI and Argentum

Assuming the 90 days horizon Fobi AI is expected to generate 4.33 times more return on investment than Argentum. However, Fobi AI is 4.33 times more volatile than Argentum 47. It trades about 0.14 of its potential returns per unit of risk. Argentum 47 is currently generating about 0.15 per unit of risk. If you would invest  1.30  in Fobi AI on December 28, 2024 and sell it today you would lose (0.20) from holding Fobi AI or give up 15.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.8%
Values	Daily Returns

Fobi AI  vs.  Argentum 47

Fobi AI

Risk-Adjusted Performance

Good

Over the last 90 days Fobi AI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak forward indicators, Fobi AI reported solid returns over the last few months and may actually be approaching a breakup point.

Argentum 47

Risk-Adjusted Performance

Good

Over the last 90 days Argentum 47 has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak technical and fundamental indicators, Argentum reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fobi AI and Argentum

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

The idea behind Fobi AI and Argentum 47 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.