Correlation Between Eastern Platinum and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Eastern Platinum and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Eastern Platinum and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Platinum and Dow Jones.
Diversification Opportunities for Eastern Platinum and Dow Jones
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eastern and Dow is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Platinum Limited and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Eastern Platinum i.e., Eastern Platinum and Dow Jones go up and down completely randomly.
Pair Corralation between Eastern Platinum and Dow Jones
Assuming the 90 days trading horizon Eastern Platinum Limited is expected to generate 9.17 times more return on investment than Dow Jones. However, Eastern Platinum is 9.17 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 14.00 in Eastern Platinum Limited on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Eastern Platinum Limited or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Eastern Platinum Limited vs. Dow Jones Industrial
Performance |
| Timeline |
Eastern Platinum and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Eastern Platinum Limited
Pair trading matchups for Eastern Platinum
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Eastern Platinum and Dow Jones
The main advantage of trading using opposite Eastern Platinum and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Platinum position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Eastern Platinum vs. Platinum Group Metals | Eastern Platinum vs. Entree Resources | Eastern Platinum vs. Aura Minerals | Eastern Platinum vs. Minco Silver |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |