Correlation Between Broadwind and Platinum Group
Can any of the company-specific risk be diversified away by investing in both Broadwind 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 Broadwind and Platinum Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadwind and Platinum Group Metals, you can compare the effects of market volatilities on Broadwind 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 Broadwind with a short position of Platinum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadwind and Platinum Group.
Diversification Opportunities for Broadwind and Platinum Group
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Broadwind and Platinum is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Broadwind 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 Broadwind 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 Broadwind 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 Broadwind i.e., Broadwind and Platinum Group go up and down completely randomly.
Pair Corralation between Broadwind and Platinum Group
Assuming the 90 days trading horizon Broadwind is expected to under-perform the Platinum Group. In addition to that, Broadwind is 1.08 times more volatile than Platinum Group Metals. It trades about -0.02 of its total potential returns per unit of risk. Platinum Group Metals is currently generating about 0.02 per unit of volatility. If you would invest 141.00 in Platinum Group Metals on October 25, 2024 and sell it today you would lose (15.00) from holding Platinum Group Metals or give up 10.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Broadwind vs. Platinum Group Metals
Performance |
| Timeline |
| Broadwind |
| Platinum Group Metals |
Broadwind and Platinum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadwind and Platinum Group
The main advantage of trading using opposite Broadwind and Platinum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadwind 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.| Broadwind vs. Siemens Aktiengesellschaft | Broadwind vs. Siemens Aktiengesellschaft | Broadwind vs. Schneider Electric SE | Broadwind vs. Atlas Copco A |
| Platinum Group vs. Scandinavian Tobacco Group | Platinum Group vs. Japan Tobacco | Platinum Group vs. SCOTT TECHNOLOGY | Platinum Group vs. Brockhaus Capital Management |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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