Correlation Between NYSE Composite and Eastern Platinum
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Eastern 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 NYSE Composite and Eastern Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Eastern Platinum Limited, you can compare the effects of market volatilities on NYSE Composite and Eastern 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 NYSE Composite with a short position of Eastern Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Eastern Platinum.
Diversification Opportunities for NYSE Composite and Eastern Platinum
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Eastern is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Eastern Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Platinum and NYSE Composite 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 NYSE Composite are associated (or correlated) with Eastern Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Platinum has no effect on the direction of NYSE Composite i.e., NYSE Composite and Eastern Platinum go up and down completely randomly.
Pair Corralation between NYSE Composite and Eastern Platinum
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.21 times more return on investment than Eastern Platinum. However, NYSE Composite is 4.77 times less risky than Eastern Platinum. It trades about 0.21 of its potential returns per unit of risk. Eastern Platinum Limited is currently generating about -0.33 per unit of risk. If you would invest 1,911,944 in NYSE Composite on October 21, 2024 and sell it today you would earn a total of 48,793 from holding NYSE Composite or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Eastern Platinum Limited
Performance |
| Timeline |
NYSE Composite and Eastern Platinum Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Eastern Platinum Limited
Pair trading matchups for Eastern Platinum
Pair Trading with NYSE Composite and Eastern Platinum
The main advantage of trading using opposite NYSE Composite and Eastern Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Eastern 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 Eastern Platinum will offset losses from the drop in Eastern Platinum's long position.| NYSE Composite vs. National Health Investors | NYSE Composite vs. Arbor Realty Trust | NYSE Composite vs. Canaf Investments | NYSE Composite vs. Freedom Holding Corp |
| Eastern Platinum vs. Thunder Mountain Gold | Eastern Platinum vs. Chesapeake Gold Corp | Eastern Platinum vs. AbraSilver Resource Corp | Eastern Platinum vs. GoGold Resources |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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