Correlation Between Argo Blockchain and SPENN Technology

Can any of the company-specific risk be diversified away by investing in both Argo Blockchain and SPENN Technology 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 SPENN Technology 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 SPENN Technology AS, you can compare the effects of market volatilities on Argo Blockchain and SPENN Technology 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 SPENN Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Blockchain and SPENN Technology.

Diversification Opportunities for Argo Blockchain and SPENN Technology

0.0

Correlation Coefficient

Argo Blockchain  SPENN Technology

Pay attention - limited upside

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

Pair Corralation between Argo Blockchain and SPENN Technology

Given the investment horizon of 90 days Argo Blockchain PLC is expected to generate 3.42 times more return on investment than SPENN Technology. However, Argo Blockchain is 3.42 times more volatile than SPENN Technology AS. It trades about 0.02 of its potential returns per unit of risk. SPENN Technology AS is currently generating about -0.06 per unit of risk. If you would invest  142.00  in Argo Blockchain PLC on September 30, 2024 and sell it today you would lose (81.00) from holding Argo Blockchain PLC or give up 57.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.74%
Values	Daily Returns

Argo Blockchain PLC  vs.  SPENN Technology AS

Argo Blockchain PLC

Risk-Adjusted Performance

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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 inconsistent 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.

SPENN Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPENN Technology AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SPENN Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Argo Blockchain and SPENN Technology

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

The idea behind Argo Blockchain PLC and SPENN Technology AS 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.

Check out your portfolio center.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.