Correlation Between Archer Exploration and Platinum Asia
Can any of the company-specific risk be diversified away by investing in both Archer Exploration 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 Archer Exploration and Platinum Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archer Exploration and Platinum Asia Investments, you can compare the effects of market volatilities on Archer Exploration 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 Archer Exploration with a short position of Platinum Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archer Exploration and Platinum Asia.
Diversification Opportunities for Archer Exploration and Platinum Asia
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Archer and Platinum is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Archer Exploration 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 Archer Exploration 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 Archer Exploration 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 Archer Exploration i.e., Archer Exploration and Platinum Asia go up and down completely randomly.
Pair Corralation between Archer Exploration and Platinum Asia
Assuming the 90 days trading horizon Archer Exploration is expected to under-perform the Platinum Asia. In addition to that, Archer Exploration is 4.01 times more volatile than Platinum Asia Investments. It trades about -0.08 of its total potential returns per unit of risk. Platinum Asia Investments is currently generating about -0.06 per unit of volatility. If you would invest 104.00 in Platinum Asia Investments on September 13, 2024 and sell it today you would lose (2.00) from holding Platinum Asia Investments or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Archer Exploration vs. Platinum Asia Investments
Performance |
| Timeline |
| Archer Exploration |
| Platinum Asia Investments |
Archer Exploration and Platinum Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archer Exploration and Platinum Asia
The main advantage of trading using opposite Archer Exploration and Platinum Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Exploration 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.| Archer Exploration vs. Northern Star Resources | Archer Exploration vs. Evolution Mining | Archer Exploration vs. Bluescope Steel | Archer Exploration vs. Sandfire Resources NL |
| Platinum Asia vs. Falcon Metals | Platinum Asia vs. Data3 | Platinum Asia vs. Nufarm Finance NZ | Platinum Asia vs. Alto 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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