Correlation Between Nyrstar NV and Argen X

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

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

Diversification Opportunities for Nyrstar NV and Argen X

0.65

Correlation Coefficient

Nyrstar NV  Argen X

Poor diversification

The 3 months correlation between Nyrstar and Argen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nyrstar NV and Argen X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argen X and Nyrstar NV 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 Nyrstar NV are associated (or correlated) with Argen X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argen X has no effect on the direction of Nyrstar NV i.e., Nyrstar NV and Argen X go up and down completely randomly.

Pair Corralation between Nyrstar NV and Argen X

Assuming the 90 days trading horizon Nyrstar NV is expected to generate 4.15 times more return on investment than Argen X. However, Nyrstar NV is 4.15 times more volatile than Argen X. It trades about 0.03 of its potential returns per unit of risk. Argen X is currently generating about 0.04 per unit of risk. If you would invest  7.00  in Nyrstar NV on November 29, 2024 and sell it today you would earn a total of  0.20  from holding Nyrstar NV or generate 2.86% return on investment over 90 days.

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

Nyrstar NV  vs.  Argen X

Nyrstar NV

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nyrstar NV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Nyrstar NV may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Argen X

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Argen X are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Argen X is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Nyrstar NV and Argen X

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

The idea behind Nyrstar NV and Argen X 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.