Correlation Between Rogers and Arq

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

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

Diversification Opportunities for Rogers and Arq

0.07

Correlation Coefficient

Rogers  Arq

Significant diversification

The 3 months correlation between Rogers and Arq is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Rogers and Arq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arq Inc and Rogers 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 Rogers are associated (or correlated) with Arq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arq Inc has no effect on the direction of Rogers i.e., Rogers and Arq go up and down completely randomly.

Pair Corralation between Rogers and Arq

Considering the 90-day investment horizon Rogers is expected to under-perform the Arq. But the stock apears to be less risky and, when comparing its historical volatility, Rogers is 2.15 times less risky than Arq. The stock trades about -0.15 of its potential returns per unit of risk. The Arq Inc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  602.00  in Arq Inc on October 7, 2024 and sell it today you would earn a total of  134.00  from holding Arq Inc or generate 22.26% return on investment over 90 days.

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

Rogers  vs.  Arq Inc

Rogers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rogers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Rogers is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Arq Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arq Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Arq reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rogers and Arq

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

The idea behind Rogers and Arq Inc 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.