Correlation Between Computershare and Platinum Asset
Can any of the company-specific risk be diversified away by investing in both Computershare 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 Computershare and Platinum Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Computershare and Platinum Asset Management, you can compare the effects of market volatilities on Computershare 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 Computershare with a short position of Platinum Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computershare and Platinum Asset.
Diversification Opportunities for Computershare and Platinum Asset
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Computershare and Platinum is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Computershare 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 Computershare 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 Computershare 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 Computershare i.e., Computershare and Platinum Asset go up and down completely randomly.
Pair Corralation between Computershare and Platinum Asset
Assuming the 90 days trading horizon Computershare is expected to generate 0.49 times more return on investment than Platinum Asset. However, Computershare is 2.05 times less risky than Platinum Asset. It trades about 0.1 of its potential returns per unit of risk. Platinum Asset Management is currently generating about 0.01 per unit of risk. If you would invest 2,401 in Computershare on August 29, 2024 and sell it today you would earn a total of 704.00 from holding Computershare or generate 29.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Computershare vs. Platinum Asset Management
Performance |
| Timeline |
| Computershare |
| Platinum Asset Management |
Computershare and Platinum Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computershare and Platinum Asset
The main advantage of trading using opposite Computershare and Platinum Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computershare 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.| Computershare vs. Aussie Broadband | Computershare vs. EROAD | Computershare vs. Treasury Wine Estates | Computershare vs. Sandon Capital Investments |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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