Correlation Between AKA Brands and Argo Blockchain

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

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

Diversification Opportunities for AKA Brands and Argo Blockchain

0.58

Correlation Coefficient

AKA Brands  Argo Blockchain

Very weak diversification

The 3 months correlation between AKA and Argo is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding AKA Brands Holding and Argo Blockchain PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Blockchain PLC and AKA Brands 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 AKA Brands Holding are associated (or correlated) with Argo Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Blockchain PLC has no effect on the direction of AKA Brands i.e., AKA Brands and Argo Blockchain go up and down completely randomly.

Pair Corralation between AKA Brands and Argo Blockchain

Considering the 90-day investment horizon AKA Brands Holding is expected to under-perform the Argo Blockchain. But the stock apears to be less risky and, when comparing its historical volatility, AKA Brands Holding is 4.26 times less risky than Argo Blockchain. The stock trades about -0.04 of its potential returns per unit of risk. The Argo Blockchain PLC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Argo Blockchain PLC on May 29, 2025 and sell it today you would lose (7.00) from holding Argo Blockchain PLC or give up 20.0% of portfolio value over 90 days.

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

AKA Brands Holding  vs.  Argo Blockchain PLC

AKA Brands Holding

Risk-Adjusted Performance

Weakest

Over the last 90 days AKA Brands Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Argo Blockchain PLC

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Argo Blockchain PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, Argo Blockchain disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AKA Brands and Argo Blockchain

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

The idea behind AKA Brands Holding and Argo Blockchain PLC 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.