Correlation Between IShares Fundamental and Eastern Platinum
Can any of the company-specific risk be diversified away by investing in both IShares Fundamental and Eastern Platinum 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 IShares Fundamental and Eastern Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Fundamental Hedged and Eastern Platinum Limited, you can compare the effects of market volatilities on IShares Fundamental and Eastern Platinum 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 IShares Fundamental with a short position of Eastern Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Fundamental and Eastern Platinum.
Diversification Opportunities for IShares Fundamental and Eastern Platinum
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and Eastern is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding iShares Fundamental Hedged and Eastern Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Platinum and IShares Fundamental 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 iShares Fundamental Hedged are associated (or correlated) with Eastern Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Platinum has no effect on the direction of IShares Fundamental i.e., IShares Fundamental and Eastern Platinum go up and down completely randomly.
Pair Corralation between IShares Fundamental and Eastern Platinum
Assuming the 90 days trading horizon IShares Fundamental is expected to generate 6.13 times less return on investment than Eastern Platinum. But when comparing it to its historical volatility, iShares Fundamental Hedged is 10.48 times less risky than Eastern Platinum. It trades about 0.12 of its potential returns per unit of risk. Eastern Platinum Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Eastern Platinum Limited on September 1, 2024 and sell it today you would earn a total of 7.00 from holding Eastern Platinum Limited or generate 63.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Fundamental Hedged vs. Eastern Platinum Limited
Performance |
| Timeline |
| iShares Fundamental |
| Eastern Platinum |
IShares Fundamental and Eastern Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Fundamental and Eastern Platinum
The main advantage of trading using opposite IShares Fundamental and Eastern Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Fundamental position performs unexpectedly, Eastern Platinum 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 Eastern Platinum will offset losses from the drop in Eastern Platinum's long position.| IShares Fundamental vs. Brompton Global Dividend | IShares Fundamental vs. Global Healthcare Income | IShares Fundamental vs. Tech Leaders Income | IShares Fundamental vs. Brompton North American |
| Eastern Platinum vs. Platinum Group Metals | Eastern Platinum vs. Entree Resources | Eastern Platinum vs. Aura Minerals | Eastern Platinum vs. Minco Silver |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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