Correlation Between Argo Group and SOJE

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

By analyzing existing cross correlation between Argo Group 65 and SOJE, you can compare the effects of market volatilities on Argo Group and SOJE 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 Group with a short position of SOJE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Group and SOJE.

Diversification Opportunities for Argo Group and SOJE

0.85

Correlation Coefficient

Argo Group  SOJE

Very poor diversification

The 3 months correlation between Argo and SOJE is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Argo Group 65 and SOJE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOJE and Argo Group 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 Group 65 are associated (or correlated) with SOJE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOJE has no effect on the direction of Argo Group i.e., Argo Group and SOJE go up and down completely randomly.

Pair Corralation between Argo Group and SOJE

Given the investment horizon of 90 days Argo Group 65 is expected to generate 0.96 times more return on investment than SOJE. However, Argo Group 65 is 1.04 times less risky than SOJE. It trades about 0.02 of its potential returns per unit of risk. SOJE is currently generating about 0.0 per unit of risk. If you would invest  2,068  in Argo Group 65 on February 26, 2024 and sell it today you would earn a total of  98.00  from holding Argo Group 65 or generate 4.74% return on investment over 90 days.

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

Argo Group 65  vs.  SOJE

Argo Group 65

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Argo Group 65 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Argo Group is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

SOJE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SOJE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking indicators, SOJE is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Argo Group and SOJE

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

The idea behind Argo Group 65 and SOJE 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..