Correlation Between Impala Platinum and American Clean
Can any of the company-specific risk be diversified away by investing in both Impala Platinum and American Clean 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 Impala Platinum and American Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impala Platinum Holdings and American Clean Resources, you can compare the effects of market volatilities on Impala Platinum and American Clean 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 Impala Platinum with a short position of American Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impala Platinum and American Clean.
Diversification Opportunities for Impala Platinum and American Clean
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Impala and American is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Impala Platinum Holdings and American Clean Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Clean Resources and Impala 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 Impala Platinum Holdings are associated (or correlated) with American Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Clean Resources has no effect on the direction of Impala Platinum i.e., Impala Platinum and American Clean go up and down completely randomly.
Pair Corralation between Impala Platinum and American Clean
Assuming the 90 days horizon Impala Platinum is expected to generate 158.31 times less return on investment than American Clean. But when comparing it to its historical volatility, Impala Platinum Holdings is 1.45 times less risky than American Clean. It trades about 0.0 of its potential returns per unit of risk. American Clean Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 299.00 in American Clean Resources on September 2, 2024 and sell it today you would earn a total of 206.00 from holding American Clean Resources or generate 68.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 54.3% |
| Values | Daily Returns |
Impala Platinum Holdings vs. American Clean Resources
Performance |
| Timeline |
| Impala Platinum Holdings |
| American Clean Resources |
Impala Platinum and American Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impala Platinum and American Clean
The main advantage of trading using opposite Impala Platinum and American Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impala Platinum position performs unexpectedly, American Clean 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 American Clean will offset losses from the drop in American Clean's long position.| Impala Platinum vs. Impala Platinum Holdings | Impala Platinum vs. Anglo American Platinum | Impala Platinum vs. Platinum Group Metals | Impala Platinum vs. AbraSilver Resource Corp |
| American Clean vs. Defiance Silver Corp | American Clean vs. HUMANA INC | American Clean vs. SCOR PK | American Clean vs. Aquagold International |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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