Correlation Between American Public and Platinum Investment
Can any of the company-specific risk be diversified away by investing in both American Public 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 American Public and Platinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Public Education and Platinum Investment Management, you can compare the effects of market volatilities on American Public 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 American Public with a short position of Platinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Public and Platinum Investment.
Diversification Opportunities for American Public and Platinum Investment
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Platinum is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding American Public Education and Platinum Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Investment and American Public 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 American Public Education 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 American Public i.e., American Public and Platinum Investment go up and down completely randomly.
Pair Corralation between American Public and Platinum Investment
Assuming the 90 days horizon American Public Education is expected to generate 1.75 times more return on investment than Platinum Investment. However, American Public is 1.75 times more volatile than Platinum Investment Management. It trades about 0.04 of its potential returns per unit of risk. Platinum Investment Management is currently generating about 0.06 per unit of risk. If you would invest 1,770 in American Public Education on August 27, 2024 and sell it today you would earn a total of 100.00 from holding American Public Education or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Public Education vs. Platinum Investment Management
Performance |
| Timeline |
| American Public Education |
| Platinum Investment |
American Public and Platinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Public and Platinum Investment
The main advantage of trading using opposite American Public and Platinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Public 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.| American Public vs. AIR PRODCHEMICALS | American Public vs. Sanyo Chemical Industries | American Public vs. Quaker Chemical | American Public vs. FORMPIPE SOFTWARE AB |
| Platinum Investment vs. Cass Information Systems | Platinum Investment vs. Fidelity National Information | Platinum Investment vs. Boyd Gaming | Platinum Investment vs. HOCHSCHILD MINING |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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