Correlation Between Platinum Asia and Archer Exploration
Can any of the company-specific risk be diversified away by investing in both Platinum Asia and Archer Exploration 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 Asia and Archer Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Asia Investments and Archer Exploration, you can compare the effects of market volatilities on Platinum Asia and Archer Exploration 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 Asia with a short position of Archer Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and Archer Exploration.
Diversification Opportunities for Platinum Asia and Archer Exploration
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Platinum and Archer is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and Archer Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Exploration and Platinum Asia 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 Asia Investments are associated (or correlated) with Archer Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Exploration has no effect on the direction of Platinum Asia i.e., Platinum Asia and Archer Exploration go up and down completely randomly.
Pair Corralation between Platinum Asia and Archer Exploration
Assuming the 90 days trading horizon Platinum Asia Investments is expected to generate 0.25 times more return on investment than Archer Exploration. However, Platinum Asia Investments is 4.01 times less risky than Archer Exploration. It trades about -0.06 of its potential returns per unit of risk. Archer Exploration is currently generating about -0.08 per unit of risk. If you would invest 104.00 in Platinum Asia Investments on September 13, 2024 and sell it today you would lose (2.00) from holding Platinum Asia Investments or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Platinum Asia Investments vs. Archer Exploration
Performance |
| Timeline |
| Platinum Asia Investments |
| Archer Exploration |
Platinum Asia and Archer Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asia and Archer Exploration
The main advantage of trading using opposite Platinum Asia and Archer Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia position performs unexpectedly, Archer Exploration 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 Archer Exploration will offset losses from the drop in Archer Exploration's long position.| Platinum Asia vs. Falcon Metals | Platinum Asia vs. Data3 | Platinum Asia vs. Nufarm Finance NZ | Platinum Asia vs. Alto Metals |
| Archer Exploration vs. Northern Star Resources | Archer Exploration vs. Evolution Mining | Archer Exploration vs. Bluescope Steel | Archer Exploration vs. Sandfire Resources NL |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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