Correlation Between Carlton Investments and Platinum Asia
Can any of the company-specific risk be diversified away by investing in both Carlton Investments 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 Carlton Investments and Platinum Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlton Investments and Platinum Asia Investments, you can compare the effects of market volatilities on Carlton Investments 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 Carlton Investments with a short position of Platinum Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlton Investments and Platinum Asia.
Diversification Opportunities for Carlton Investments and Platinum Asia
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Carlton and Platinum is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Carlton Investments 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 Carlton Investments 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 Carlton Investments 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 Carlton Investments i.e., Carlton Investments and Platinum Asia go up and down completely randomly.
Pair Corralation between Carlton Investments and Platinum Asia
Assuming the 90 days trading horizon Carlton Investments is expected to generate 4.1 times less return on investment than Platinum Asia. But when comparing it to its historical volatility, Carlton Investments is 1.45 times less risky than Platinum Asia. It trades about 0.02 of its potential returns per unit of risk. Platinum Asia Investments is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 78.00 in Platinum Asia Investments on August 30, 2024 and sell it today you would earn a total of 21.00 from holding Platinum Asia Investments or generate 26.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlton Investments vs. Platinum Asia Investments
Performance |
| Timeline |
| Carlton Investments |
| Platinum Asia Investments |
Carlton Investments and Platinum Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlton Investments and Platinum Asia
The main advantage of trading using opposite Carlton Investments and Platinum Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlton Investments 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.| Carlton Investments vs. GQG Partners DRC | Carlton Investments vs. MFF Capital Investments | Carlton Investments vs. Metrics Master Income | Carlton Investments vs. Australian United Investment |
| Platinum Asia vs. Champion Iron | Platinum Asia vs. Ridley | Platinum Asia vs. Peel Mining | Platinum Asia vs. Australian Dairy Farms |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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