Correlation Between Eastern Platinum and IShares Fundamental
Can any of the company-specific risk be diversified away by investing in both Eastern Platinum and IShares Fundamental 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 Eastern Platinum and IShares Fundamental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Platinum Limited and iShares Fundamental Hedged, you can compare the effects of market volatilities on Eastern Platinum and IShares Fundamental 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 Eastern Platinum with a short position of IShares Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Platinum and IShares Fundamental.
Diversification Opportunities for Eastern Platinum and IShares Fundamental
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eastern and IShares is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Platinum Limited and iShares Fundamental Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Fundamental and Eastern Platinum 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 Eastern Platinum Limited are associated (or correlated) with IShares Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Fundamental has no effect on the direction of Eastern Platinum i.e., Eastern Platinum and IShares Fundamental go up and down completely randomly.
Pair Corralation between Eastern Platinum and IShares Fundamental
Assuming the 90 days trading horizon Eastern Platinum Limited is expected to generate 10.48 times more return on investment than IShares Fundamental. However, Eastern Platinum is 10.48 times more volatile than iShares Fundamental Hedged. It trades about 0.07 of its potential returns per unit of risk. iShares Fundamental Hedged is currently generating about 0.12 per unit of risk. 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 |
Eastern Platinum Limited vs. iShares Fundamental Hedged
Performance |
| Timeline |
| Eastern Platinum |
| iShares Fundamental |
Eastern Platinum and IShares Fundamental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Platinum and IShares Fundamental
The main advantage of trading using opposite Eastern Platinum and IShares Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Platinum position performs unexpectedly, IShares Fundamental 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 IShares Fundamental will offset losses from the drop in IShares Fundamental's long position.| Eastern Platinum vs. Platinum Group Metals | Eastern Platinum vs. Entree Resources | Eastern Platinum vs. Aura Minerals | Eastern Platinum vs. Minco Silver |
| IShares Fundamental vs. Brompton Global Dividend | IShares Fundamental vs. Global Healthcare Income | IShares Fundamental vs. Tech Leaders Income | IShares Fundamental vs. Brompton North American |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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