Correlation Between Impala Platinum and Platinum Group
Can any of the company-specific risk be diversified away by investing in both Impala Platinum and Platinum Group 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 Platinum Group 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 Platinum Group Metals, you can compare the effects of market volatilities on Impala Platinum and Platinum Group 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 Platinum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impala Platinum and Platinum Group.
Diversification Opportunities for Impala Platinum and Platinum Group
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Impala and Platinum is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Impala Platinum Holdings and Platinum Group Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Group Metals 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 Platinum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Group Metals has no effect on the direction of Impala Platinum i.e., Impala Platinum and Platinum Group go up and down completely randomly.
Pair Corralation between Impala Platinum and Platinum Group
Assuming the 90 days horizon Impala Platinum Holdings is expected to under-perform the Platinum Group. But the otc stock apears to be less risky and, when comparing its historical volatility, Impala Platinum Holdings is 1.35 times less risky than Platinum Group. The otc stock trades about -0.17 of its potential returns per unit of risk. The Platinum Group Metals is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 181.00 in Platinum Group Metals on September 1, 2024 and sell it today you would lose (8.00) from holding Platinum Group Metals or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impala Platinum Holdings vs. Platinum Group Metals
Performance |
| Timeline |
| Impala Platinum Holdings |
| Platinum Group Metals |
Impala Platinum and Platinum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impala Platinum and Platinum Group
The main advantage of trading using opposite Impala Platinum and Platinum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impala Platinum position performs unexpectedly, Platinum Group 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 Group will offset losses from the drop in Platinum Group's long position.| Impala Platinum vs. Anglo American Platinum | Impala Platinum vs. Sibanye Gold Ltd | Impala Platinum vs. Anglo American PLC | Impala Platinum vs. Fortescue Metals Group |
| Platinum Group vs. Endeavour Silver Corp | Platinum Group vs. Avino Silver Gold | Platinum Group vs. Fortuna Silver Mines | Platinum Group vs. Impala Platinum Holdings |
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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