Correlation Between Argo Investments and Pinnacle Investment

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

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

Diversification Opportunities for Argo Investments and Pinnacle Investment

0.41

Correlation Coefficient

Argo Investments  Pinnacle Investment

Very weak diversification

The 3 months correlation between Argo and Pinnacle is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Argo Investments and Pinnacle Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Investment and Argo Investments 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 Investments are associated (or correlated) with Pinnacle Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Investment has no effect on the direction of Argo Investments i.e., Argo Investments and Pinnacle Investment go up and down completely randomly.

Pair Corralation between Argo Investments and Pinnacle Investment

Assuming the 90 days trading horizon Argo Investments is expected to generate 15.75 times less return on investment than Pinnacle Investment. But when comparing it to its historical volatility, Argo Investments is 3.62 times less risky than Pinnacle Investment. It trades about 0.09 of its potential returns per unit of risk. Pinnacle Investment Management is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  1,809  in Pinnacle Investment Management on August 28, 2024 and sell it today you would earn a total of  631.00  from holding Pinnacle Investment Management or generate 34.88% return on investment over 90 days.

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

Argo Investments  vs.  Pinnacle Investment Management

Argo Investments

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Argo Investments are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Argo Investments is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pinnacle Investment

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pinnacle Investment Management are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Pinnacle Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Argo Investments and Pinnacle Investment

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

The idea behind Argo Investments and Pinnacle Investment Management 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.