Correlation Between Collins Foods and Platinum Asset
Can any of the company-specific risk be diversified away by investing in both Collins Foods 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 Collins Foods and Platinum Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collins Foods and Platinum Asset Management, you can compare the effects of market volatilities on Collins Foods 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 Collins Foods with a short position of Platinum Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collins Foods and Platinum Asset.
Diversification Opportunities for Collins Foods and Platinum Asset
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Collins and Platinum is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Collins Foods 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 Collins Foods 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 Collins Foods 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 Collins Foods i.e., Collins Foods and Platinum Asset go up and down completely randomly.
Pair Corralation between Collins Foods and Platinum Asset
Assuming the 90 days trading horizon Collins Foods is expected to under-perform the Platinum Asset. But the stock apears to be less risky and, when comparing its historical volatility, Collins Foods is 1.48 times less risky than Platinum Asset. The stock trades about -0.05 of its potential returns per unit of risk. The Platinum Asset Management is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 67.00 in Platinum Asset Management on October 25, 2024 and sell it today you would earn a total of 2.00 from holding Platinum Asset Management or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collins Foods vs. Platinum Asset Management
Performance |
| Timeline |
| Collins Foods |
| Platinum Asset Management |
Collins Foods and Platinum Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collins Foods and Platinum Asset
The main advantage of trading using opposite Collins Foods and Platinum Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collins Foods 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.| Collins Foods vs. MotorCycle Holdings | Collins Foods vs. 29Metals | Collins Foods vs. Flagship Investments | Collins Foods vs. Spirit Telecom |
| Platinum Asset vs. Collins Foods | Platinum Asset vs. Insurance Australia Group | Platinum Asset vs. Balkan Mining and | Platinum Asset vs. De Grey Mining |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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