Correlation Between Centaurus Metals and Platinum Asset
Can any of the company-specific risk be diversified away by investing in both Centaurus Metals 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 Centaurus Metals and Platinum Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaurus Metals and Platinum Asset Management, you can compare the effects of market volatilities on Centaurus Metals 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 Centaurus Metals with a short position of Platinum Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaurus Metals and Platinum Asset.
Diversification Opportunities for Centaurus Metals and Platinum Asset
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Centaurus and Platinum is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Centaurus Metals 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 Centaurus Metals 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 Centaurus Metals 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 Centaurus Metals i.e., Centaurus Metals and Platinum Asset go up and down completely randomly.
Pair Corralation between Centaurus Metals and Platinum Asset
Assuming the 90 days trading horizon Centaurus Metals is expected to generate 1.91 times more return on investment than Platinum Asset. However, Centaurus Metals is 1.91 times more volatile than Platinum Asset Management. It trades about 0.16 of its potential returns per unit of risk. Platinum Asset Management is currently generating about 0.09 per unit of risk. If you would invest 36.00 in Centaurus Metals on November 1, 2024 and sell it today you would earn a total of 4.00 from holding Centaurus Metals or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centaurus Metals vs. Platinum Asset Management
Performance |
| Timeline |
| Centaurus Metals |
| Platinum Asset Management |
Centaurus Metals and Platinum Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaurus Metals and Platinum Asset
The main advantage of trading using opposite Centaurus Metals and Platinum Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaurus Metals 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.| Centaurus Metals vs. Platinum Asset Management | Centaurus Metals vs. Qbe Insurance Group | Centaurus Metals vs. Autosports Group | Centaurus Metals vs. K2 Asset Management |
| Platinum Asset vs. Sports Entertainment Group | Platinum Asset vs. Southern Cross Media | Platinum Asset vs. Balkan Mining and | Platinum Asset vs. Viva Leisure |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |