Correlation Between Argen X and Onward Medical

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

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

Diversification Opportunities for Argen X and Onward Medical

-0.57

Correlation Coefficient

Argen X  Onward Medical

Excellent diversification

The 3 months correlation between Argen and Onward is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Argen X and Onward Medical NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onward Medical NV and Argen X 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 Argen X are associated (or correlated) with Onward Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onward Medical NV has no effect on the direction of Argen X i.e., Argen X and Onward Medical go up and down completely randomly.

Pair Corralation between Argen X and Onward Medical

Assuming the 90 days trading horizon Argen X is expected to generate 1.54 times less return on investment than Onward Medical. But when comparing it to its historical volatility, Argen X is 2.16 times less risky than Onward Medical. It trades about 0.07 of its potential returns per unit of risk. Onward Medical NV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  346.00  in Onward Medical NV on September 23, 2024 and sell it today you would earn a total of  143.00  from holding Onward Medical NV or generate 41.33% return on investment over 90 days.

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

Argen X  vs.  Onward Medical NV

Argen X

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Argen X are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Argen X reported solid returns over the last few months and may actually be approaching a breakup point.

Onward Medical NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Onward Medical NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Onward Medical is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Argen X and Onward Medical

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

The idea behind Argen X and Onward Medical NV 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.