Correlation Between Eastern Platinum and Clifton Mining
Can any of the company-specific risk be diversified away by investing in both Eastern Platinum and Clifton Mining 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 Clifton Mining 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 Clifton Mining Co, you can compare the effects of market volatilities on Eastern Platinum and Clifton Mining 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 Clifton Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Platinum and Clifton Mining.
Diversification Opportunities for Eastern Platinum and Clifton Mining
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eastern and Clifton is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Platinum Limited and Clifton Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clifton Mining 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 Clifton Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clifton Mining has no effect on the direction of Eastern Platinum i.e., Eastern Platinum and Clifton Mining go up and down completely randomly.
Pair Corralation between Eastern Platinum and Clifton Mining
Assuming the 90 days horizon Eastern Platinum is expected to generate 12.29 times less return on investment than Clifton Mining. But when comparing it to its historical volatility, Eastern Platinum Limited is 1.55 times less risky than Clifton Mining. It trades about 0.0 of its potential returns per unit of risk. Clifton Mining Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Clifton Mining Co on November 3, 2024 and sell it today you would lose (0.70) from holding Clifton Mining Co or give up 14.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Platinum Limited vs. Clifton Mining Co
Performance |
| Timeline |
| Eastern Platinum |
| Clifton Mining |
Eastern Platinum and Clifton Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Platinum and Clifton Mining
The main advantage of trading using opposite Eastern Platinum and Clifton Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Platinum position performs unexpectedly, Clifton Mining 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 Clifton Mining will offset losses from the drop in Clifton Mining's long position.| Eastern Platinum vs. Thunder Mountain Gold | Eastern Platinum vs. Chesapeake Gold Corp | Eastern Platinum vs. AbraSilver Resource Corp | Eastern Platinum vs. GoGold Resources |
| Clifton Mining vs. Cartier Iron Corp | Clifton Mining vs. Arctic Star Exploration | Clifton Mining vs. Capella Minerals Limited | Clifton Mining vs. Denarius Silver Corp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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