Correlation Between Argo Gold and Artemis Gold

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

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

Diversification Opportunities for Argo Gold and Artemis Gold

0.22

Correlation Coefficient

Argo Gold  Artemis Gold

Modest diversification

The 3 months correlation between Argo and Artemis is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Argo Gold and Artemis Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artemis Gold and Argo Gold 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 Gold are associated (or correlated) with Artemis Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artemis Gold has no effect on the direction of Argo Gold i.e., Argo Gold and Artemis Gold go up and down completely randomly.

Pair Corralation between Argo Gold and Artemis Gold

Assuming the 90 days horizon Argo Gold is expected to generate 3.92 times less return on investment than Artemis Gold. In addition to that, Argo Gold is 2.1 times more volatile than Artemis Gold. It trades about 0.01 of its total potential returns per unit of risk. Artemis Gold is currently generating about 0.1 per unit of volatility. If you would invest  318.00  in Artemis Gold on September 14, 2024 and sell it today you would earn a total of  706.00  from holding Artemis Gold or generate 222.01% return on investment over 90 days.

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

Argo Gold  vs.  Artemis Gold

Argo Gold

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Argo Gold are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Argo Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Artemis Gold

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Artemis Gold are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Artemis Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Argo Gold and Artemis Gold

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

The idea behind Argo Gold and Artemis Gold 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 Global Correlations module to find global opportunities by holding instruments from different markets.