Correlation Between Exela Technologies and Argo Blockchain

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

By analyzing existing cross correlation between Exela Technologies Preferred and Argo Blockchain plc, you can compare the effects of market volatilities on Exela Technologies and Argo Blockchain 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 Exela Technologies with a short position of Argo Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exela Technologies and Argo Blockchain.

Diversification Opportunities for Exela Technologies and Argo Blockchain

0.0

Correlation Coefficient

Exela Technologies  Argo Blockchain

Pay attention - limited upside

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

Pair Corralation between Exela Technologies and Argo Blockchain

If you would invest  608.00  in Argo Blockchain plc on December 27, 2024 and sell it today you would earn a total of  94.00  from holding Argo Blockchain plc or generate 15.46% return on investment over 90 days.

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

Exela Technologies Preferred  vs.  Argo Blockchain plc

Exela Technologies

Risk-Adjusted Performance

Very Weak

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

Argo Blockchain plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Argo Blockchain plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Argo Blockchain disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exela Technologies and Argo Blockchain

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

The idea behind Exela Technologies Preferred and Argo Blockchain plc 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.