Correlation Between Argo Group and Burford Capital

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Can any of the company-specific risk be diversified away by investing in both Argo Group and Burford Capital 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 Argo Group and Burford Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Group Intl and Burford Capital, you can compare the effects of market volatilities on Argo Group and Burford Capital 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 Argo Group with a short position of Burford Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Group and Burford Capital.

Diversification Opportunities for Argo Group and Burford Capital

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Argo Group and Burford is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Argo Group Intl and Burford Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burford Capital and Argo Group 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 Argo Group Intl are associated (or correlated) with Burford Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burford Capital has no effect on the direction of Argo Group i.e., Argo Group and Burford Capital go up and down completely randomly.

Pair Corralation between Argo Group and Burford Capital

Given the investment horizon of 90 days Argo Group Intl is expected to under-perform the Burford Capital. In addition to that, Argo Group is 1.18 times more volatile than Burford Capital. It trades about -0.1 of its total potential returns per unit of risk. Burford Capital is currently generating about -0.03 per unit of volatility. If you would invest  1,053  in Burford Capital on July 9, 2022 and sell it today you would lose (261.00)  from holding Burford Capital or give up 24.79% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Argo Group Intl  vs.  Burford Capital

 Performance (%) 
       Timeline  
Argo Group Intl 
Argo Group Performance
0 of 100
Over the last 90 days Argo Group Intl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in November 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Argo Group Price Channel

Burford Capital 
Burford Performance
0 of 100
Over the last 90 days Burford Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in November 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Burford Price Channel

Argo Group and Burford Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Argo Group and Burford Capital

The main advantage of trading using opposite Argo Group and Burford Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Group position performs unexpectedly, Burford Capital 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 Burford Capital will offset losses from the drop in Burford Capital's long position.
Argo Group vs. Amazon Inc
The idea behind Argo Group Intl and Burford Capital 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.
Burford Capital vs. Microsoft Corp
Check out your portfolio center. 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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