Correlation Between Athena Bitcoin and Argo Blockchain

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

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

Diversification Opportunities for Athena Bitcoin and Argo Blockchain

-0.21

Correlation Coefficient

Athena Bitcoin  Argo Blockchain

Very good diversification

The 3 months correlation between Athena and Argo is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Athena Bitcoin Global 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 Athena Bitcoin 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 Athena Bitcoin Global 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 Athena Bitcoin i.e., Athena Bitcoin and Argo Blockchain go up and down completely randomly.

Pair Corralation between Athena Bitcoin and Argo Blockchain

Given the investment horizon of 90 days Athena Bitcoin Global is expected to generate 1.57 times more return on investment than Argo Blockchain. However, Athena Bitcoin is 1.57 times more volatile than Argo Blockchain PLC. It trades about 0.04 of its potential returns per unit of risk. Argo Blockchain PLC is currently generating about 0.03 per unit of risk. If you would invest  40.00  in Athena Bitcoin Global on September 21, 2024 and sell it today you would lose (29.00) from holding Athena Bitcoin Global or give up 72.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Athena Bitcoin Global  vs.  Argo Blockchain PLC

Athena Bitcoin Global

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Athena Bitcoin Global are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting forward indicators, Athena Bitcoin unveiled solid returns over the last few months and may actually be approaching a breakup point.

Argo Blockchain PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Argo Blockchain PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Athena Bitcoin and Argo Blockchain

The main advantage of trading using opposite Athena Bitcoin and Argo Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athena Bitcoin 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 Athena Bitcoin Global 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.