Correlation Between Taoping and Argentum

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

By analyzing existing cross correlation between Taoping and Argentum 47, you can compare the effects of market volatilities on Taoping and Argentum 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 Taoping with a short position of Argentum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taoping and Argentum.

Diversification Opportunities for Taoping and Argentum

0.29

Correlation Coefficient

Taoping  Argentum

Modest diversification

The 3 months correlation between Taoping and Argentum is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Taoping and Argentum 47 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argentum 47 and Taoping 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 Taoping are associated (or correlated) with Argentum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argentum 47 has no effect on the direction of Taoping i.e., Taoping and Argentum go up and down completely randomly.

Pair Corralation between Taoping and Argentum

Given the investment horizon of 90 days Taoping is expected to under-perform the Argentum. But the stock apears to be less risky and, when comparing its historical volatility, Taoping is 1.66 times less risky than Argentum. The stock trades about -0.04 of its potential returns per unit of risk. The Argentum 47 is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  5.32  in Argentum 47 on September 14, 2024 and sell it today you would lose (5.06) from holding Argentum 47 or give up 95.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.63%
Values	Daily Returns

Taoping  vs.  Argentum 47

Taoping

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taoping has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Argentum 47

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Argentum 47 has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Argentum is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Taoping and Argentum

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

The idea behind Taoping and Argentum 47 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.