Correlation Between Metalstech and Argo Investments

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

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

Diversification Opportunities for Metalstech and Argo Investments

0.64

Correlation Coefficient

Metalstech  Argo Investments

Poor diversification

The 3 months correlation between Metalstech and Argo is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Metalstech and Argo Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Investments and Metalstech 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 Metalstech are associated (or correlated) with Argo Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Investments has no effect on the direction of Metalstech i.e., Metalstech and Argo Investments go up and down completely randomly.

Pair Corralation between Metalstech and Argo Investments

Assuming the 90 days trading horizon Metalstech is expected to generate 9.86 times more return on investment than Argo Investments. However, Metalstech is 9.86 times more volatile than Argo Investments. It trades about 0.08 of its potential returns per unit of risk. Argo Investments is currently generating about 0.2 per unit of risk. If you would invest  11.00  in Metalstech on April 24, 2025 and sell it today you would earn a total of  2.00  from holding Metalstech or generate 18.18% return on investment over 90 days.

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

Metalstech  vs.  Argo Investments

Metalstech

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Metalstech are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Metalstech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Argo Investments

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Argo Investments are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Argo Investments may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Metalstech and Argo Investments

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

The idea behind Metalstech and Argo Investments 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.