Correlation Between Austco Healthcare and Platinum Asset
Can any of the company-specific risk be diversified away by investing in both Austco Healthcare and Platinum Asset 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 Austco Healthcare and Platinum Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austco Healthcare and Platinum Asset Management, you can compare the effects of market volatilities on Austco Healthcare and Platinum Asset 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 Austco Healthcare with a short position of Platinum Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austco Healthcare and Platinum Asset.
Diversification Opportunities for Austco Healthcare and Platinum Asset
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Austco and Platinum is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Austco Healthcare and Platinum Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asset Management and Austco Healthcare 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 Austco Healthcare are associated (or correlated) with Platinum Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asset Management has no effect on the direction of Austco Healthcare i.e., Austco Healthcare and Platinum Asset go up and down completely randomly.
Pair Corralation between Austco Healthcare and Platinum Asset
Assuming the 90 days trading horizon Austco Healthcare is expected to generate 1.39 times more return on investment than Platinum Asset. However, Austco Healthcare is 1.39 times more volatile than Platinum Asset Management. It trades about 0.09 of its potential returns per unit of risk. Platinum Asset Management is currently generating about 0.04 per unit of risk. If you would invest 19.00 in Austco Healthcare on September 2, 2024 and sell it today you would earn a total of 6.00 from holding Austco Healthcare or generate 31.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austco Healthcare vs. Platinum Asset Management
Performance |
| Timeline |
| Austco Healthcare |
| Platinum Asset Management |
Austco Healthcare and Platinum Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austco Healthcare and Platinum Asset
The main advantage of trading using opposite Austco Healthcare and Platinum Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austco Healthcare position performs unexpectedly, Platinum Asset 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 Asset will offset losses from the drop in Platinum Asset's long position.| Austco Healthcare vs. Jupiter Energy | Austco Healthcare vs. WA1 Resources | Austco Healthcare vs. Cooper Metals | Austco Healthcare vs. OD6 Metals |
| Platinum Asset vs. WA1 Resources | Platinum Asset vs. Predictive Discovery | Platinum Asset vs. Cooper Metals | Platinum Asset vs. OD6 Metals |
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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