Correlation Between Platinum Group and Platinum Investment
Can any of the company-specific risk be diversified away by investing in both Platinum Group and Platinum Investment 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 Platinum Group and Platinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Group Metals and Platinum Investment Management, you can compare the effects of market volatilities on Platinum Group and Platinum Investment 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 Platinum Group with a short position of Platinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Group and Platinum Investment.
Diversification Opportunities for Platinum Group and Platinum Investment
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Platinum and Platinum is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Group Metals and Platinum Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Investment and Platinum Group 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 Platinum Group Metals are associated (or correlated) with Platinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Investment has no effect on the direction of Platinum Group i.e., Platinum Group and Platinum Investment go up and down completely randomly.
Pair Corralation between Platinum Group and Platinum Investment
Assuming the 90 days trading horizon Platinum Group Metals is expected to under-perform the Platinum Investment. But the stock apears to be less risky and, when comparing its historical volatility, Platinum Group Metals is 1.08 times less risky than Platinum Investment. The stock trades about -0.12 of its potential returns per unit of risk. The Platinum Investment Management is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 39.00 in Platinum Investment Management on October 7, 2024 and sell it today you would earn a total of 3.00 from holding Platinum Investment Management or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Group Metals vs. Platinum Investment Management
Performance |
| Timeline |
| Platinum Group Metals |
| Platinum Investment |
Platinum Group and Platinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Group and Platinum Investment
The main advantage of trading using opposite Platinum Group and Platinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Group position performs unexpectedly, Platinum Investment 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 Investment will offset losses from the drop in Platinum Investment's long position.| Platinum Group vs. Genertec Universal Medical | Platinum Group vs. Compugroup Medical SE | Platinum Group vs. CHINA SOUTHN AIR H | Platinum Group vs. IMAGIN MEDICAL INC |
| Platinum Investment vs. Singapore Telecommunications Limited | Platinum Investment vs. GEELY AUTOMOBILE | Platinum Investment vs. Ribbon Communications | Platinum Investment vs. Cars Inc |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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