Correlation Between Argo Blockchain and CreditRiskMonitor

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

Diversification Opportunities for Argo Blockchain and CreditRiskMonitor

-0.46

Correlation Coefficient

Argo Blockchain  CreditRiskMonitor

Very good diversification

The 3 months correlation between Argo and CreditRiskMonitor is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Argo Blockchain PLC and CreditRiskMonitorCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CreditRiskMonitorCom 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 CreditRiskMonitor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CreditRiskMonitorCom has no effect on the direction of Argo Blockchain i.e., Argo Blockchain and CreditRiskMonitor go up and down completely randomly.

Pair Corralation between Argo Blockchain and CreditRiskMonitor

Assuming the 90 days horizon Argo Blockchain is expected to generate 3.47 times less return on investment than CreditRiskMonitor. In addition to that, Argo Blockchain is 2.47 times more volatile than CreditRiskMonitorCom. It trades about 0.02 of its total potential returns per unit of risk. CreditRiskMonitorCom is currently generating about 0.21 per unit of volatility. If you would invest  228.00  in CreditRiskMonitorCom on September 2, 2024 and sell it today you would earn a total of  117.00  from holding CreditRiskMonitorCom or generate 51.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Argo Blockchain PLC  vs.  CreditRiskMonitorCom

Argo Blockchain PLC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Argo Blockchain PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward-looking signals, Argo Blockchain reported solid returns over the last few months and may actually be approaching a breakup point.

CreditRiskMonitorCom

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CreditRiskMonitorCom are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, CreditRiskMonitor showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Argo Blockchain and CreditRiskMonitor

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

The idea behind Argo Blockchain PLC and CreditRiskMonitorCom 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.