Correlation Between Argo Blockchain and Erste Group

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

Diversification Opportunities for Argo Blockchain and Erste Group

-0.34

Correlation Coefficient

Argo Blockchain  Erste Group

Very good diversification

The 3 months correlation between Argo and Erste is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Argo Blockchain PLC and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank 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 Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of Argo Blockchain i.e., Argo Blockchain and Erste Group go up and down completely randomly.

Pair Corralation between Argo Blockchain and Erste Group

Assuming the 90 days trading horizon Argo Blockchain PLC is expected to generate 10.99 times more return on investment than Erste Group. However, Argo Blockchain is 10.99 times more volatile than Erste Group Bank. It trades about 0.09 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.21 per unit of risk. If you would invest  300.00  in Argo Blockchain PLC on April 25, 2025 and sell it today you would earn a total of  5.00  from holding Argo Blockchain PLC or generate 1.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.32%
Values	Daily Returns

Argo Blockchain PLC  vs.  Erste Group Bank

Argo Blockchain PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Argo Blockchain PLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Argo Blockchain exhibited solid returns over the last few months and may actually be approaching a breakup point.

Erste Group Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Erste Group Bank are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Erste Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Argo Blockchain and Erste Group

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

The idea behind Argo Blockchain PLC and Erste Group Bank 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.