Correlation Between SPACE and Argo Gold

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

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

Diversification Opportunities for SPACE and Argo Gold

-0.56

Correlation Coefficient

SPACE  Argo Gold

Excellent diversification

The 3 months correlation between SPACE and Argo is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding SPACE and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold and SPACE 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 SPACE are associated (or correlated) with Argo Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Gold has no effect on the direction of SPACE i.e., SPACE and Argo Gold go up and down completely randomly.

Pair Corralation between SPACE and Argo Gold

Assuming the 90 days horizon SPACE is expected to generate 6.5 times less return on investment than Argo Gold. But when comparing it to its historical volatility, SPACE is 1.17 times less risky than Argo Gold. It trades about 0.0 of its potential returns per unit of risk. Argo Gold is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  5.79  in Argo Gold on September 4, 2024 and sell it today you would lose (0.29) from holding Argo Gold or give up 5.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	60.16%
Values	Daily Returns

SPACE  vs.  Argo Gold

SPACE

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPACE are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, SPACE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Argo Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Argo Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SPACE and Argo Gold

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

The idea behind SPACE and Argo Gold 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.