Correlation Between DAIRY FARM and Platinum Investment
Can any of the company-specific risk be diversified away by investing in both DAIRY FARM and Platinum Investment 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 DAIRY FARM and Platinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAIRY FARM INTL and Platinum Investment Management, you can compare the effects of market volatilities on DAIRY FARM and Platinum Investment 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 DAIRY FARM with a short position of Platinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAIRY FARM and Platinum Investment.
Diversification Opportunities for DAIRY FARM and Platinum Investment
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DAIRY and Platinum is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding DAIRY FARM INTL and Platinum Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Investment and DAIRY FARM 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 DAIRY FARM INTL are associated (or correlated) with Platinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Investment has no effect on the direction of DAIRY FARM i.e., DAIRY FARM and Platinum Investment go up and down completely randomly.
Pair Corralation between DAIRY FARM and Platinum Investment
Assuming the 90 days trading horizon DAIRY FARM INTL is expected to generate 0.38 times more return on investment than Platinum Investment. However, DAIRY FARM INTL is 2.63 times less risky than Platinum Investment. It trades about 0.05 of its potential returns per unit of risk. Platinum Investment Management is currently generating about 0.01 per unit of risk. If you would invest 218.00 in DAIRY FARM INTL on October 14, 2024 and sell it today you would earn a total of 2.00 from holding DAIRY FARM INTL or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAIRY FARM INTL vs. Platinum Investment Management
Performance |
| Timeline |
| DAIRY FARM INTL |
| Platinum Investment |
DAIRY FARM and Platinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAIRY FARM and Platinum Investment
The main advantage of trading using opposite DAIRY FARM and Platinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAIRY FARM position performs unexpectedly, Platinum Investment 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 Investment will offset losses from the drop in Platinum Investment's long position.| DAIRY FARM vs. Seven West Media | DAIRY FARM vs. Darden Restaurants | DAIRY FARM vs. ETFS Coffee ETC | DAIRY FARM vs. Media and Games |
| Platinum Investment vs. Meli Hotels International | Platinum Investment vs. The Hongkong and | Platinum Investment vs. InterContinental Hotels Group | Platinum Investment vs. PPHE HOTEL GROUP |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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