Correlation Between Tessenderlo and Argen X

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

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

Diversification Opportunities for Tessenderlo and Argen X

-0.45

Correlation Coefficient

Tessenderlo  Argen X

Very good diversification

The 3 months correlation between Tessenderlo and Argen is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Tessenderlo and Argen X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argen X and Tessenderlo 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 Tessenderlo 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 Tessenderlo i.e., Tessenderlo and Argen X go up and down completely randomly.

Pair Corralation between Tessenderlo and Argen X

Assuming the 90 days trading horizon Tessenderlo is expected to under-perform the Argen X. In addition to that, Tessenderlo is 1.26 times more volatile than Argen X. It trades about -0.03 of its total potential returns per unit of risk. Argen X is currently generating about 0.02 per unit of volatility. If you would invest  58,980  in Argen X on December 2, 2024 and sell it today you would earn a total of  740.00  from holding Argen X or generate 1.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tessenderlo  vs.  Argen X

Tessenderlo

Risk-Adjusted Performance

Very Weak

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

Argen X

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Argen X are ranked lower than 1 (%) 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 Tessenderlo and Argen X

The main advantage of trading using opposite Tessenderlo and Argen X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tessenderlo 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 Tessenderlo 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.