Correlation Between Gemfields Group and Platinum Group
Can any of the company-specific risk be diversified away by investing in both Gemfields Group and Platinum Group 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 Gemfields Group and Platinum Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gemfields Group Limited and Platinum Group Metals, you can compare the effects of market volatilities on Gemfields Group and Platinum Group 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 Gemfields Group with a short position of Platinum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemfields Group and Platinum Group.
Diversification Opportunities for Gemfields Group and Platinum Group
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gemfields and Platinum is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Gemfields Group Limited and Platinum Group Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Group Metals and Gemfields 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 Gemfields Group Limited are associated (or correlated) with Platinum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Group Metals has no effect on the direction of Gemfields Group i.e., Gemfields Group and Platinum Group go up and down completely randomly.
Pair Corralation between Gemfields Group and Platinum Group
Assuming the 90 days horizon Gemfields Group Limited is expected to under-perform the Platinum Group. But the stock apears to be less risky and, when comparing its historical volatility, Gemfields Group Limited is 1.18 times less risky than Platinum Group. The stock trades about -0.02 of its potential returns per unit of risk. The Platinum Group Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 92.00 in Platinum Group Metals on September 14, 2024 and sell it today you would earn a total of 42.00 from holding Platinum Group Metals or generate 45.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Gemfields Group Limited vs. Platinum Group Metals
Performance |
| Timeline |
| Gemfields Group |
| Platinum Group Metals |
Gemfields Group and Platinum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gemfields Group and Platinum Group
The main advantage of trading using opposite Gemfields Group and Platinum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gemfields Group position performs unexpectedly, Platinum Group 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 Group will offset losses from the drop in Platinum Group's long position.| Gemfields Group vs. NEW PACIFIC METALS | Gemfields Group vs. Superior Plus Corp | Gemfields Group vs. SIVERS SEMICONDUCTORS AB | Gemfields Group vs. Norsk Hydro ASA |
| Platinum Group vs. CEOTRONICS | Platinum Group vs. AEON STORES | Platinum Group vs. Coor Service Management | Platinum Group vs. Ares Management 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 the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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