Correlation Between Gold Road and Platinum Asset
Can any of the company-specific risk be diversified away by investing in both Gold Road and Platinum Asset 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 Gold Road and Platinum Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Road Resources and Platinum Asset Management, you can compare the effects of market volatilities on Gold Road and Platinum Asset 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 Gold Road with a short position of Platinum Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and Platinum Asset.
Diversification Opportunities for Gold Road and Platinum Asset
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gold and Platinum is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and Platinum Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asset Management and Gold Road 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 Gold Road Resources are associated (or correlated) with Platinum Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asset Management has no effect on the direction of Gold Road i.e., Gold Road and Platinum Asset go up and down completely randomly.
Pair Corralation between Gold Road and Platinum Asset
Assuming the 90 days trading horizon Gold Road Resources is expected to generate 0.98 times more return on investment than Platinum Asset. However, Gold Road Resources is 1.02 times less risky than Platinum Asset. It trades about 0.01 of its potential returns per unit of risk. Platinum Asset Management is currently generating about 0.0 per unit of risk. If you would invest 196.00 in Gold Road Resources on August 29, 2024 and sell it today you would lose (10.00) from holding Gold Road Resources or give up 5.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Gold Road Resources vs. Platinum Asset Management
Performance |
| Timeline |
| Gold Road Resources |
| Platinum Asset Management |
Gold Road and Platinum Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Road and Platinum Asset
The main advantage of trading using opposite Gold Road and Platinum Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road position performs unexpectedly, Platinum Asset 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 Asset will offset losses from the drop in Platinum Asset's long position.| Gold Road vs. Northern Star Resources | Gold Road vs. Evolution Mining | Gold Road vs. Bluescope Steel | Gold Road vs. Sandfire Resources NL |
| Platinum Asset vs. Champion Iron | Platinum Asset vs. Ridley | Platinum Asset vs. Peel Mining | Platinum Asset 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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