Correlation Between North American and Impala Platinum
Can any of the company-specific risk be diversified away by investing in both North American and Impala Platinum 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 North American and Impala Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North American Construction and Impala Platinum Holdings, you can compare the effects of market volatilities on North American and Impala Platinum 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 North American with a short position of Impala Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and Impala Platinum.
Diversification Opportunities for North American and Impala Platinum
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between North and Impala is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding North American Construction and Impala Platinum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impala Platinum Holdings and North American 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 North American Construction are associated (or correlated) with Impala Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impala Platinum Holdings has no effect on the direction of North American i.e., North American and Impala Platinum go up and down completely randomly.
Pair Corralation between North American and Impala Platinum
Assuming the 90 days horizon North American Construction is expected to generate 0.95 times more return on investment than Impala Platinum. However, North American Construction is 1.05 times less risky than Impala Platinum. It trades about 0.18 of its potential returns per unit of risk. Impala Platinum Holdings is currently generating about -0.09 per unit of risk. If you would invest 1,930 in North American Construction on October 11, 2024 and sell it today you would earn a total of 170.00 from holding North American Construction or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
North American Construction vs. Impala Platinum Holdings
Performance |
| Timeline |
| North American Const |
| Impala Platinum Holdings |
North American and Impala Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and Impala Platinum
The main advantage of trading using opposite North American and Impala Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North American position performs unexpectedly, Impala Platinum 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 Impala Platinum will offset losses from the drop in Impala Platinum's long position.| North American vs. Playmates Toys Limited | North American vs. Commonwealth Bank of | North American vs. CDN IMPERIAL BANK | North American vs. PLAYSTUDIOS A DL 0001 |
| Impala Platinum vs. Daito Trust Construction | Impala Platinum vs. AGRICULTBK HADR25 YC | Impala Platinum vs. TITAN MACHINERY | Impala Platinum vs. North American Construction |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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