Correlation Between Argo Blockchain and EBullion

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

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

Diversification Opportunities for Argo Blockchain and EBullion

0.72

Correlation Coefficient

Argo Blockchain  EBullion

Poor diversification

The 3 months correlation between Argo and EBullion is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Argo Blockchain PLC and EBullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBullion and Argo Blockchain 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 Argo Blockchain PLC are associated (or correlated) with EBullion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBullion has no effect on the direction of Argo Blockchain i.e., Argo Blockchain and EBullion go up and down completely randomly.

Pair Corralation between Argo Blockchain and EBullion

If you would invest  0.12  in EBullion on September 21, 2024 and sell it today you would earn a total of  0.00  from holding EBullion or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Argo Blockchain PLC  vs.  EBullion

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.

EBullion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EBullion has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, EBullion is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Argo Blockchain and EBullion

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

The idea behind Argo Blockchain PLC and EBullion 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.