Correlation Between Golden Minerals and Platinum Group
Can any of the company-specific risk be diversified away by investing in both Golden Minerals 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 Golden Minerals and Platinum Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Minerals and Platinum Group Metals, you can compare the effects of market volatilities on Golden Minerals 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 Golden Minerals with a short position of Platinum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Minerals and Platinum Group.
Diversification Opportunities for Golden Minerals and Platinum Group
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Platinum is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Golden Minerals 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 Golden Minerals 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 Golden Minerals 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 Golden Minerals i.e., Golden Minerals and Platinum Group go up and down completely randomly.
Pair Corralation between Golden Minerals and Platinum Group
Given the investment horizon of 90 days Golden Minerals is expected to under-perform the Platinum Group. In addition to that, Golden Minerals is 1.17 times more volatile than Platinum Group Metals. It trades about -0.08 of its total potential returns per unit of risk. Platinum Group Metals is currently generating about 0.08 per unit of volatility. If you would invest 128.00 in Platinum Group Metals on October 24, 2024 and sell it today you would earn a total of 6.00 from holding Platinum Group Metals or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 27.78% |
| Values | Daily Returns |
Golden Minerals vs. Platinum Group Metals
Performance |
| Timeline |
| Golden Minerals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Platinum Group Metals |
Golden Minerals and Platinum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Minerals and Platinum Group
The main advantage of trading using opposite Golden Minerals and Platinum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Minerals 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.| Golden Minerals vs. Summa Silver Corp | Golden Minerals vs. GoGold Resources | Golden Minerals vs. Scottie Resources Corp | Golden Minerals vs. Brixton Metals |
| Platinum Group vs. Endeavour Silver Corp | Platinum Group vs. Avino Silver Gold | Platinum Group vs. Fortuna Silver Mines | Platinum Group vs. Impala Platinum Holdings |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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