Correlation Between IMedia Brands and Argo Blockchain

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

By analyzing existing cross correlation between IMedia Brands 85 and Argo Blockchain plc, you can compare the effects of market volatilities on IMedia Brands 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 IMedia Brands with a short position of Argo Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMedia Brands and Argo Blockchain.

Diversification Opportunities for IMedia Brands and Argo Blockchain

0.66

Correlation Coefficient

IMedia Brands  Argo Blockchain

Poor diversification

The 3 months correlation between IMedia and Argo is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding IMedia Brands 85 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 IMedia Brands 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 IMedia Brands 85 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 IMedia Brands i.e., IMedia Brands and Argo Blockchain go up and down completely randomly.

Pair Corralation between IMedia Brands and Argo Blockchain

If you would invest  98.00  in IMedia Brands 85 on September 29, 2024 and sell it today you would earn a total of  0.00  from holding IMedia Brands 85 or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.0%
Values	Daily Returns

IMedia Brands 85  vs.  Argo Blockchain plc

IMedia Brands 85

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IMedia Brands 85 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, IMedia Brands is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Argo Blockchain plc

Risk-Adjusted Performance

0 of 100

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 conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with IMedia Brands and Argo Blockchain

The main advantage of trading using opposite IMedia Brands and Argo Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMedia Brands 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 IMedia Brands 85 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.