Correlation Between Metalla Royalty and Platinum Group
Can any of the company-specific risk be diversified away by investing in both Metalla Royalty 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 Metalla Royalty and Platinum Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metalla Royalty Streaming and Platinum Group Metals, you can compare the effects of market volatilities on Metalla Royalty 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 Metalla Royalty with a short position of Platinum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalla Royalty and Platinum Group.
Diversification Opportunities for Metalla Royalty and Platinum Group
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metalla and Platinum is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Metalla Royalty Streaming 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 Metalla Royalty 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 Metalla Royalty Streaming 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 Metalla Royalty i.e., Metalla Royalty and Platinum Group go up and down completely randomly.
Pair Corralation between Metalla Royalty and Platinum Group
Considering the 90-day investment horizon Metalla Royalty Streaming is expected to under-perform the Platinum Group. But the stock apears to be less risky and, when comparing its historical volatility, Metalla Royalty Streaming is 1.25 times less risky than Platinum Group. The stock trades about -0.25 of its potential returns per unit of risk. The Platinum Group Metals is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 205.00 in Platinum Group Metals on August 27, 2024 and sell it today you would lose (31.00) from holding Platinum Group Metals or give up 15.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metalla Royalty Streaming vs. Platinum Group Metals
Performance |
| Timeline |
| Metalla Royalty Streaming |
| Platinum Group Metals |
Metalla Royalty and Platinum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalla Royalty and Platinum Group
The main advantage of trading using opposite Metalla Royalty and Platinum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalla Royalty 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.| Metalla Royalty vs. Triple Flag Precious | Metalla Royalty vs. Endeavour Silver Corp | Metalla Royalty vs. SilverCrest Metals | Metalla Royalty vs. Gatos Silver |
| Platinum Group vs. Hecla Mining | Platinum Group vs. McEwen Mining | Platinum Group vs. Endeavour Silver Corp | Platinum Group vs. New Pacific Metals |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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