Correlation Between Minco Silver and Platinum Group
Can any of the company-specific risk be diversified away by investing in both Minco Silver 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 Minco Silver and Platinum Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minco Silver and Platinum Group Metals, you can compare the effects of market volatilities on Minco Silver 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 Minco Silver with a short position of Platinum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minco Silver and Platinum Group.
Diversification Opportunities for Minco Silver and Platinum Group
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Minco and Platinum is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Minco Silver 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 Minco Silver 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 Minco Silver 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 Minco Silver i.e., Minco Silver and Platinum Group go up and down completely randomly.
Pair Corralation between Minco Silver and Platinum Group
Assuming the 90 days trading horizon Minco Silver is expected to generate 1.59 times less return on investment than Platinum Group. In addition to that, Minco Silver is 1.2 times more volatile than Platinum Group Metals. It trades about 0.03 of its total potential returns per unit of risk. Platinum Group Metals is currently generating about 0.06 per unit of volatility. If you would invest 152.00 in Platinum Group Metals on August 25, 2024 and sell it today you would earn a total of 94.00 from holding Platinum Group Metals or generate 61.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minco Silver vs. Platinum Group Metals
Performance |
| Timeline |
| Minco Silver |
| Platinum Group Metals |
Minco Silver and Platinum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minco Silver and Platinum Group
The main advantage of trading using opposite Minco Silver and Platinum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minco Silver 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.| Minco Silver vs. Excellon Resources | Minco Silver vs. IMPACT Silver Corp | Minco Silver vs. Almaden Minerals | Minco Silver vs. Bear Creek Mining |
| Platinum Group vs. Eastern Platinum Limited | Platinum Group vs. Entree Resources | Platinum Group vs. Solitario Exploration Royalty | Platinum Group vs. Minco Silver |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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