Correlation Between AMP and Platinum Asia
Can any of the company-specific risk be diversified away by investing in both AMP and Platinum Asia 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 AMP and Platinum Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMP and Platinum Asia Investments, you can compare the effects of market volatilities on AMP and Platinum Asia 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 AMP with a short position of Platinum Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMP and Platinum Asia.
Diversification Opportunities for AMP and Platinum Asia
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMP and Platinum is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding AMP and Platinum Asia Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asia Investments and AMP 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 AMP are associated (or correlated) with Platinum Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asia Investments has no effect on the direction of AMP i.e., AMP and Platinum Asia go up and down completely randomly.
Pair Corralation between AMP and Platinum Asia
Assuming the 90 days trading horizon AMP is expected to generate 2.23 times more return on investment than Platinum Asia. However, AMP is 2.23 times more volatile than Platinum Asia Investments. It trades about 0.31 of its potential returns per unit of risk. Platinum Asia Investments is currently generating about 0.18 per unit of risk. If you would invest 160.00 in AMP on November 3, 2024 and sell it today you would earn a total of 19.00 from holding AMP or generate 11.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMP vs. Platinum Asia Investments
Performance |
| Timeline |
| AMP |
| Platinum Asia Investments |
AMP and Platinum Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMP and Platinum Asia
The main advantage of trading using opposite AMP and Platinum Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMP position performs unexpectedly, Platinum Asia 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 Asia will offset losses from the drop in Platinum Asia's long position.| AMP vs. Centrex Metals | AMP vs. DY6 Metals | AMP vs. Pinnacle Investment Management | AMP vs. MetalsGrove Mining |
| Platinum Asia vs. Australian Unity Office | Platinum Asia vs. Beston Global Food | Platinum Asia vs. Epsilon Healthcare | Platinum Asia vs. Ironbark Capital |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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