Correlation Between Williams Industrial and Argan

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

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

Diversification Opportunities for Williams Industrial and Argan

0.0

Correlation Coefficient

Williams Industrial  Argan

Pay attention - limited upside

The 3 months correlation between Williams and Argan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Williams Industrial Services and Argan Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argan Inc and Williams Industrial 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 Williams Industrial Services are associated (or correlated) with Argan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argan Inc has no effect on the direction of Williams Industrial i.e., Williams Industrial and Argan go up and down completely randomly.

Pair Corralation between Williams Industrial and Argan

If you would invest (100.00) in Williams Industrial Services on December 19, 2024 and sell it today you would earn a total of  100.00  from holding Williams Industrial Services or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Williams Industrial Services  vs.  Argan Inc

Williams Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Williams Industrial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Williams Industrial is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Argan Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Argan Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Williams Industrial and Argan

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

The idea behind Williams Industrial Services and Argan 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.