Correlation Between Impala Platinum and Fresnillo PLC
Can any of the company-specific risk be diversified away by investing in both Impala Platinum and Fresnillo PLC 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 Fresnillo PLC 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 Fresnillo PLC, you can compare the effects of market volatilities on Impala Platinum and Fresnillo PLC 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 Fresnillo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impala Platinum and Fresnillo PLC.
Diversification Opportunities for Impala Platinum and Fresnillo PLC
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Impala and Fresnillo is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Impala Platinum Holdings and Fresnillo PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresnillo PLC 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 Fresnillo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresnillo PLC has no effect on the direction of Impala Platinum i.e., Impala Platinum and Fresnillo PLC go up and down completely randomly.
Pair Corralation between Impala Platinum and Fresnillo PLC
Assuming the 90 days horizon Impala Platinum Holdings is expected to generate 0.89 times more return on investment than Fresnillo PLC. However, Impala Platinum Holdings is 1.12 times less risky than Fresnillo PLC. It trades about -0.12 of its potential returns per unit of risk. Fresnillo PLC is currently generating about -0.21 per unit of risk. If you would invest 636.00 in Impala Platinum Holdings on September 1, 2024 and sell it today you would lose (46.00) from holding Impala Platinum Holdings or give up 7.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Impala Platinum Holdings vs. Fresnillo PLC
Performance |
| Timeline |
| Impala Platinum Holdings |
| Fresnillo PLC |
Impala Platinum and Fresnillo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impala Platinum and Fresnillo PLC
The main advantage of trading using opposite Impala Platinum and Fresnillo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impala Platinum position performs unexpectedly, Fresnillo PLC 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 Fresnillo PLC will offset losses from the drop in Fresnillo PLC'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 |
| Fresnillo PLC vs. Defiance Silver Corp | Fresnillo PLC vs. HUMANA INC | Fresnillo PLC vs. SCOR PK | Fresnillo PLC 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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