Correlation Between Argan and Hill International

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

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

Diversification Opportunities for Argan and Hill International

-0.76

Correlation Coefficient

Argan  Hill International

Pay attention - limited upside

The 3 months correlation between Argan and Hill is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Argan Inc and Hill International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hill International and Argan 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 Argan Inc are associated (or correlated) with Hill International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hill International has no effect on the direction of Argan i.e., Argan and Hill International go up and down completely randomly.

Pair Corralation between Argan and Hill International

If you would invest  5,031  in Argan Inc on January 25, 2024 and sell it today you would earn a total of  1,132  from holding Argan Inc or generate 22.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

Argan Inc  vs.  Hill International

Argan Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Argan Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Argan showed solid returns over the last few months and may actually be approaching a breakup point.

Hill International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hill International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Hill International is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Argan and Hill International

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

The idea behind Argan Inc and Hill International 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.