Correlation Between Amex Exploration and Argo Gold

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

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

Diversification Opportunities for Amex Exploration and Argo Gold

-0.65

Correlation Coefficient

Amex Exploration  Argo Gold

Excellent diversification

The 3 months correlation between Amex and Argo is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Amex Exploration and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold and Amex Exploration 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 Amex Exploration are associated (or correlated) with Argo Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Gold has no effect on the direction of Amex Exploration i.e., Amex Exploration and Argo Gold go up and down completely randomly.

Pair Corralation between Amex Exploration and Argo Gold

Assuming the 90 days horizon Amex Exploration is expected to generate 0.65 times more return on investment than Argo Gold. However, Amex Exploration is 1.55 times less risky than Argo Gold. It trades about 0.24 of its potential returns per unit of risk. Argo Gold is currently generating about -0.05 per unit of risk. If you would invest  80.00  in Amex Exploration on May 10, 2025 and sell it today you would earn a total of  49.00  from holding Amex Exploration or generate 61.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Amex Exploration  vs.  Argo Gold

Amex Exploration

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amex Exploration are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Amex Exploration reported solid returns over the last few months and may actually be approaching a breakup point.

Argo Gold

Risk-Adjusted Performance

Weakest

Over the last 90 days Argo Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Amex Exploration and Argo Gold

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

The idea behind Amex Exploration and Argo Gold 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.