Correlation Between Medical Developments and Platinum Asset
Can any of the company-specific risk be diversified away by investing in both Medical Developments and Platinum Asset 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 Medical Developments and Platinum Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Developments International and Platinum Asset Management, you can compare the effects of market volatilities on Medical Developments and Platinum Asset 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 Medical Developments with a short position of Platinum Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Developments and Platinum Asset.
Diversification Opportunities for Medical Developments and Platinum Asset
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Medical and Platinum is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Medical Developments Internati and Platinum Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asset Management and Medical Developments 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 Medical Developments International are associated (or correlated) with Platinum Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asset Management has no effect on the direction of Medical Developments i.e., Medical Developments and Platinum Asset go up and down completely randomly.
Pair Corralation between Medical Developments and Platinum Asset
Assuming the 90 days trading horizon Medical Developments International is expected to generate 1.24 times more return on investment than Platinum Asset. However, Medical Developments is 1.24 times more volatile than Platinum Asset Management. It trades about -0.31 of its potential returns per unit of risk. Platinum Asset Management is currently generating about -0.43 per unit of risk. If you would invest 47.00 in Medical Developments International on August 31, 2024 and sell it today you would lose (6.00) from holding Medical Developments International or give up 12.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Developments Internati vs. Platinum Asset Management
Performance |
| Timeline |
| Medical Developments |
| Platinum Asset Management |
Medical Developments and Platinum Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Developments and Platinum Asset
The main advantage of trading using opposite Medical Developments and Platinum Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Developments position performs unexpectedly, Platinum Asset 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 Asset will offset losses from the drop in Platinum Asset's long position.| Medical Developments vs. Aneka Tambang Tbk | Medical Developments vs. Woolworths | Medical Developments vs. Commonwealth Bank | Medical Developments vs. BHP Group Limited |
| Platinum Asset vs. Lendlease Group | Platinum Asset vs. Medical Developments International | Platinum Asset vs. Perpetual Credit Income | Platinum Asset vs. Beston Global Food |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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