Correlation Between PPHE HOTEL and Platinum Investment
Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL and Platinum Investment 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 PPHE HOTEL and Platinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE HOTEL GROUP and Platinum Investment Management, you can compare the effects of market volatilities on PPHE HOTEL and Platinum Investment 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 PPHE HOTEL with a short position of Platinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and Platinum Investment.
Diversification Opportunities for PPHE HOTEL and Platinum Investment
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PPHE and Platinum is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and Platinum Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Investment and PPHE HOTEL 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 PPHE HOTEL GROUP are associated (or correlated) with Platinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Investment has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and Platinum Investment go up and down completely randomly.
Pair Corralation between PPHE HOTEL and Platinum Investment
Assuming the 90 days trading horizon PPHE HOTEL GROUP is expected to under-perform the Platinum Investment. But the stock apears to be less risky and, when comparing its historical volatility, PPHE HOTEL GROUP is 1.33 times less risky than Platinum Investment. The stock trades about -0.06 of its potential returns per unit of risk. The Platinum Investment Management is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Platinum Investment Management on October 14, 2024 and sell it today you would earn a total of 0.00 from holding Platinum Investment Management or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE HOTEL GROUP vs. Platinum Investment Management
Performance |
| Timeline |
| PPHE HOTEL GROUP |
| Platinum Investment |
PPHE HOTEL and Platinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE HOTEL and Platinum Investment
The main advantage of trading using opposite PPHE HOTEL and Platinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL position performs unexpectedly, Platinum Investment 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 Platinum Investment will offset losses from the drop in Platinum Investment's long position.| PPHE HOTEL vs. Quaker Chemical | PPHE HOTEL vs. Soken Chemical Engineering | PPHE HOTEL vs. Corporate Travel Management | PPHE HOTEL vs. Sinopec Shanghai Petrochemical |
| Platinum Investment vs. Meli Hotels International | Platinum Investment vs. The Hongkong and | Platinum Investment vs. InterContinental Hotels Group | Platinum Investment vs. PPHE HOTEL GROUP |
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 the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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