Correlation Between Spearmint Resources and Argosy Minerals

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

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

Diversification Opportunities for Spearmint Resources and Argosy Minerals

-0.29

Correlation Coefficient

Spearmint Resources  Argosy Minerals

Very good diversification

The 3 months correlation between Spearmint and Argosy is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Spearmint Resources and Argosy Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argosy Minerals and Spearmint Resources 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 Spearmint Resources are associated (or correlated) with Argosy Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argosy Minerals has no effect on the direction of Spearmint Resources i.e., Spearmint Resources and Argosy Minerals go up and down completely randomly.

Pair Corralation between Spearmint Resources and Argosy Minerals

Assuming the 90 days horizon Spearmint Resources is expected to generate 9.58 times more return on investment than Argosy Minerals. However, Spearmint Resources is 9.58 times more volatile than Argosy Minerals Limited. It trades about 0.32 of its potential returns per unit of risk. Argosy Minerals Limited is currently generating about 0.14 per unit of risk. If you would invest  10.00  in Spearmint Resources on May 3, 2025 and sell it today you would lose (4.10) from holding Spearmint Resources or give up 41.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	62.5%
Values	Daily Returns

Spearmint Resources  vs.  Argosy Minerals Limited

Spearmint Resources

Risk-Adjusted Performance

Solid

Over the last 90 days Spearmint Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Spearmint Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Argosy Minerals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Argosy Minerals Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Argosy Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spearmint Resources and Argosy Minerals

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

The idea behind Spearmint Resources and Argosy Minerals Limited 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.