Correlation Between Kingsrose Mining and Platinum Asia
Can any of the company-specific risk be diversified away by investing in both Kingsrose Mining 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 Kingsrose Mining and Platinum Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingsrose Mining and Platinum Asia Investments, you can compare the effects of market volatilities on Kingsrose Mining 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 Kingsrose Mining with a short position of Platinum Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsrose Mining and Platinum Asia.
Diversification Opportunities for Kingsrose Mining and Platinum Asia
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kingsrose and Platinum is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kingsrose Mining 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 Kingsrose Mining 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 Kingsrose Mining 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 Kingsrose Mining i.e., Kingsrose Mining and Platinum Asia go up and down completely randomly.
Pair Corralation between Kingsrose Mining and Platinum Asia
Assuming the 90 days trading horizon Kingsrose Mining is expected to under-perform the Platinum Asia. In addition to that, Kingsrose Mining is 3.86 times more volatile than Platinum Asia Investments. It trades about -0.02 of its total potential returns per unit of risk. Platinum Asia Investments is currently generating about 0.05 per unit of volatility. If you would invest 92.00 in Platinum Asia Investments on August 31, 2024 and sell it today you would earn a total of 6.00 from holding Platinum Asia Investments or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingsrose Mining vs. Platinum Asia Investments
Performance |
| Timeline |
| Kingsrose Mining |
| Platinum Asia Investments |
Kingsrose Mining and Platinum Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingsrose Mining and Platinum Asia
The main advantage of trading using opposite Kingsrose Mining and Platinum Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingsrose Mining 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.| Kingsrose Mining vs. Auctus Alternative Investments | Kingsrose Mining vs. TTG Fintech | Kingsrose Mining vs. Australian Unity Office | Kingsrose Mining vs. Super Retail Group |
| Platinum Asia vs. Energy Resources | Platinum Asia vs. 88 Energy | Platinum Asia vs. Amani Gold | Platinum Asia vs. A1 Investments Resources |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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