Correlation Between Grupo Mxico and Argent Minerals

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

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

Diversification Opportunities for Grupo Mxico and Argent Minerals

0.29

Correlation Coefficient

Grupo Mxico  Argent Minerals

Modest diversification

The 3 months correlation between Grupo and Argent is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Mxico SAB and Argent Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argent Minerals and Grupo Mxico 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 Grupo Mxico SAB are associated (or correlated) with Argent Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argent Minerals has no effect on the direction of Grupo Mxico i.e., Grupo Mxico and Argent Minerals go up and down completely randomly.

Pair Corralation between Grupo Mxico and Argent Minerals

Assuming the 90 days horizon Grupo Mxico is expected to generate 13.11 times less return on investment than Argent Minerals. But when comparing it to its historical volatility, Grupo Mxico SAB is 7.41 times less risky than Argent Minerals. It trades about 0.12 of its potential returns per unit of risk. Argent Minerals Limited is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  0.05  in Argent Minerals Limited on December 29, 2024 and sell it today you would earn a total of  0.04  from holding Argent Minerals Limited or generate 80.0% return on investment over 90 days.

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

Grupo Mxico SAB  vs.  Argent Minerals Limited

Grupo Mxico SAB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Mxico SAB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Grupo Mxico may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Argent Minerals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Argent Minerals Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Argent Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Mxico and Argent Minerals

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

The idea behind Grupo Mxico SAB and Argent Minerals Limited 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.