Correlation Between NV Gold and Argo Gold

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

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

Diversification Opportunities for NV Gold and Argo Gold

0.14

Correlation Coefficient

NV Gold  Argo Gold

Average diversification

The 3 months correlation between NVGLF and Argo is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding NV Gold and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold and NV Gold 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 NV Gold 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 NV Gold i.e., NV Gold and Argo Gold go up and down completely randomly.

Pair Corralation between NV Gold and Argo Gold

Assuming the 90 days horizon NV Gold is expected to generate 1.22 times more return on investment than Argo Gold. However, NV Gold is 1.22 times more volatile than Argo Gold. It trades about 0.04 of its potential returns per unit of risk. Argo Gold is currently generating about -0.05 per unit of risk. If you would invest  9.50  in NV Gold on May 7, 2025 and sell it today you would earn a total of  0.50  from holding NV Gold or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

NV Gold  vs.  Argo Gold

NV Gold

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in NV Gold are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, NV Gold 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 weak 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 NV Gold and Argo Gold

The main advantage of trading using opposite NV Gold and Argo Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NV Gold 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 NV Gold 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.