Correlation Between Garda Diversified and Platinum Asia
Can any of the company-specific risk be diversified away by investing in both Garda Diversified and Platinum Asia 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 Garda Diversified and Platinum Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garda Diversified Ppty and Platinum Asia Investments, you can compare the effects of market volatilities on Garda Diversified and Platinum Asia 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 Garda Diversified with a short position of Platinum Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda Diversified and Platinum Asia.
Diversification Opportunities for Garda Diversified and Platinum Asia
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Garda and Platinum is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Garda Diversified Ppty and Platinum Asia Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asia Investments and Garda Diversified 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 Garda Diversified Ppty are associated (or correlated) with Platinum Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asia Investments has no effect on the direction of Garda Diversified i.e., Garda Diversified and Platinum Asia go up and down completely randomly.
Pair Corralation between Garda Diversified and Platinum Asia
Assuming the 90 days trading horizon Garda Diversified Ppty is expected to generate 0.59 times more return on investment than Platinum Asia. However, Garda Diversified Ppty is 1.69 times less risky than Platinum Asia. It trades about 0.05 of its potential returns per unit of risk. Platinum Asia Investments is currently generating about -0.26 per unit of risk. If you would invest 120.00 in Garda Diversified Ppty on August 25, 2024 and sell it today you would earn a total of 1.00 from holding Garda Diversified Ppty or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garda Diversified Ppty vs. Platinum Asia Investments
Performance |
| Timeline |
| Garda Diversified Ppty |
| Platinum Asia Investments |
Garda Diversified and Platinum Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garda Diversified and Platinum Asia
The main advantage of trading using opposite Garda Diversified and Platinum Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garda Diversified position performs unexpectedly, Platinum Asia 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 Asia will offset losses from the drop in Platinum Asia's long position.| Garda Diversified vs. Scentre Group | Garda Diversified vs. Vicinity Centres Re | Garda Diversified vs. Cromwell Property Group | Garda Diversified vs. GDI Property Group |
| Platinum Asia vs. Ecofibre | Platinum Asia vs. iShares Global Healthcare | Platinum Asia vs. Ridley | Platinum Asia vs. Australian Dairy Farms |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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