Correlation Between ANZ Group and Platinum Asset
Can any of the company-specific risk be diversified away by investing in both ANZ Group 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 ANZ Group and Platinum Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANZ Group Holdings and Platinum Asset Management, you can compare the effects of market volatilities on ANZ Group 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 ANZ Group with a short position of Platinum Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANZ Group and Platinum Asset.
Diversification Opportunities for ANZ Group and Platinum Asset
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ANZ and Platinum is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding ANZ Group Holdings 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 ANZ 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 ANZ Group Holdings 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 ANZ Group i.e., ANZ Group and Platinum Asset go up and down completely randomly.
Pair Corralation between ANZ Group and Platinum Asset
Assuming the 90 days trading horizon ANZ Group Holdings is expected to generate 0.11 times more return on investment than Platinum Asset. However, ANZ Group Holdings is 8.78 times less risky than Platinum Asset. It trades about 0.04 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 9,673 in ANZ Group Holdings on October 23, 2024 and sell it today you would earn a total of 627.00 from holding ANZ Group Holdings or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANZ Group Holdings vs. Platinum Asset Management
Performance |
| Timeline |
| ANZ Group Holdings |
| Platinum Asset Management |
ANZ Group and Platinum Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANZ Group and Platinum Asset
The main advantage of trading using opposite ANZ Group and Platinum Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANZ Group 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.| ANZ Group vs. Apiam Animal Health | ANZ Group vs. Macquarie Technology Group | ANZ Group vs. Epsilon Healthcare | ANZ Group vs. Neurotech International |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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