Correlation Between Kaufman Broad and Platinum Investment
Can any of the company-specific risk be diversified away by investing in both Kaufman Broad 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 Kaufman Broad and Platinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaufman Broad SA and Platinum Investment Management, you can compare the effects of market volatilities on Kaufman Broad 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 Kaufman Broad with a short position of Platinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Broad and Platinum Investment.
Diversification Opportunities for Kaufman Broad and Platinum Investment
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kaufman and Platinum is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Broad SA and Platinum Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Investment and Kaufman Broad 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 Kaufman Broad SA 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 Kaufman Broad i.e., Kaufman Broad and Platinum Investment go up and down completely randomly.
Pair Corralation between Kaufman Broad and Platinum Investment
Assuming the 90 days horizon Kaufman Broad SA is expected to generate 0.65 times more return on investment than Platinum Investment. However, Kaufman Broad SA is 1.54 times less risky than Platinum Investment. It trades about 0.04 of its potential returns per unit of risk. Platinum Investment Management is currently generating about -0.01 per unit of risk. If you would invest 2,476 in Kaufman Broad SA on October 13, 2024 and sell it today you would earn a total of 779.00 from holding Kaufman Broad SA or generate 31.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Kaufman Broad SA vs. Platinum Investment Management
Performance |
| Timeline |
| Kaufman Broad SA |
| Platinum Investment |
Kaufman Broad and Platinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaufman Broad and Platinum Investment
The main advantage of trading using opposite Kaufman Broad and Platinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Broad 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.| Kaufman Broad vs. The Trade Desk | Kaufman Broad vs. TRADEGATE | Kaufman Broad vs. MOVIE GAMES SA | Kaufman Broad vs. BORR DRILLING NEW |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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