Correlation Between New Pacific and Platinum Group
Can any of the company-specific risk be diversified away by investing in both New Pacific 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 New Pacific and Platinum Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Pacific Metals and Platinum Group Metals, you can compare the effects of market volatilities on New Pacific 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 New Pacific with a short position of Platinum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Pacific and Platinum Group.
Diversification Opportunities for New Pacific and Platinum Group
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between New and Platinum is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding New Pacific Metals 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 New Pacific 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 New Pacific Metals 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 New Pacific i.e., New Pacific and Platinum Group go up and down completely randomly.
Pair Corralation between New Pacific and Platinum Group
Given the investment horizon of 90 days New Pacific Metals is expected to under-perform the Platinum Group. But the stock apears to be less risky and, when comparing its historical volatility, New Pacific Metals is 1.26 times less risky than Platinum Group. The stock trades about -0.22 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Pacific Metals vs. Platinum Group Metals
Performance |
| Timeline |
| New Pacific Metals |
| Platinum Group Metals |
New Pacific and Platinum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Pacific and Platinum Group
The main advantage of trading using opposite New Pacific and Platinum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Pacific 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.| New Pacific vs. Endeavour Silver Corp | New Pacific vs. Metalla Royalty Streaming | New Pacific vs. Hecla Mining | New Pacific 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |