Correlation Between Argo Blockchain and Healthcare

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

Diversification Opportunities for Argo Blockchain and Healthcare

-0.15

Correlation Coefficient

Argo Blockchain  Healthcare

Good diversification

The 3 months correlation between Argo and Healthcare is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Argo Blockchain PLC and Healthcare AI Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare AI Acquisition 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 Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare AI Acquisition has no effect on the direction of Argo Blockchain i.e., Argo Blockchain and Healthcare go up and down completely randomly.

Pair Corralation between Argo Blockchain and Healthcare

Given the investment horizon of 90 days Argo Blockchain PLC is expected to generate 16.89 times more return on investment than Healthcare. However, Argo Blockchain is 16.89 times more volatile than Healthcare AI Acquisition. It trades about 0.07 of its potential returns per unit of risk. Healthcare AI Acquisition is currently generating about 0.04 per unit of risk. If you would invest  128.00  in Argo Blockchain PLC on June 30, 2024 and sell it today you would earn a total of  7.00  from holding Argo Blockchain PLC or generate 5.47% return on investment over 90 days.

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

Argo Blockchain PLC  vs.  Healthcare AI Acquisition

Argo Blockchain PLC

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Argo Blockchain PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile fundamental drivers, Argo Blockchain disclosed solid returns over the last few months and may actually be approaching a breakup point.

Healthcare AI Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healthcare AI Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Healthcare is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Argo Blockchain and Healthcare

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

The idea behind Argo Blockchain PLC and Healthcare AI Acquisition 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.