Correlation Between Mineral Resources and Platinum Investment
Can any of the company-specific risk be diversified away by investing in both Mineral Resources 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 Mineral Resources and Platinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mineral Resources Limited and Platinum Investment Management, you can compare the effects of market volatilities on Mineral Resources 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 Mineral Resources with a short position of Platinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mineral Resources and Platinum Investment.
Diversification Opportunities for Mineral Resources and Platinum Investment
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mineral and Platinum is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mineral Resources Limited and Platinum Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Investment and Mineral Resources 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 Mineral Resources Limited 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 Mineral Resources i.e., Mineral Resources and Platinum Investment go up and down completely randomly.
Pair Corralation between Mineral Resources and Platinum Investment
Assuming the 90 days horizon Mineral Resources Limited is expected to generate 0.85 times more return on investment than Platinum Investment. However, Mineral Resources Limited is 1.18 times less risky than Platinum Investment. It trades about 0.06 of its potential returns per unit of risk. Platinum Investment Management is currently generating about -0.28 per unit of risk. If you would invest 2,127 in Mineral Resources Limited on September 14, 2024 and sell it today you would earn a total of 65.00 from holding Mineral Resources Limited or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mineral Resources Limited vs. Platinum Investment Management
Performance |
| Timeline |
| Mineral Resources |
| Platinum Investment |
Mineral Resources and Platinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mineral Resources and Platinum Investment
The main advantage of trading using opposite Mineral Resources and Platinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mineral Resources 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.| Mineral Resources vs. URBAN OUTFITTERS | Mineral Resources vs. RYU Apparel | Mineral Resources vs. KINGBOARD CHEMICAL | Mineral Resources vs. Quaker Chemical |
| Platinum Investment vs. Ameriprise Financial | Platinum Investment vs. Ares Management Corp | Platinum Investment vs. Superior Plus Corp | Platinum Investment vs. SIVERS SEMICONDUCTORS AB |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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