Correlation Between Platinum Asia and Eagle Mountain
Can any of the company-specific risk be diversified away by investing in both Platinum Asia and Eagle Mountain 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 Eagle Mountain 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 Eagle Mountain Mining, you can compare the effects of market volatilities on Platinum Asia and Eagle Mountain 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 Eagle Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and Eagle Mountain.
Diversification Opportunities for Platinum Asia and Eagle Mountain
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Platinum and Eagle is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and Eagle Mountain Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Mountain Mining 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 Eagle Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Mountain Mining has no effect on the direction of Platinum Asia i.e., Platinum Asia and Eagle Mountain go up and down completely randomly.
Pair Corralation between Platinum Asia and Eagle Mountain
Assuming the 90 days trading horizon Platinum Asia Investments is expected to generate 0.2 times more return on investment than Eagle Mountain. However, Platinum Asia Investments is 4.99 times less risky than Eagle Mountain. It trades about 0.04 of its potential returns per unit of risk. Eagle Mountain Mining is currently generating about -0.08 per unit of risk. If you would invest 84.00 in Platinum Asia Investments on November 19, 2024 and sell it today you would earn a total of 21.00 from holding Platinum Asia Investments or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asia Investments vs. Eagle Mountain Mining
Performance |
| Timeline |
| Platinum Asia Investments |
| Eagle Mountain Mining |
Platinum Asia and Eagle Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asia and Eagle Mountain
The main advantage of trading using opposite Platinum Asia and Eagle Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia position performs unexpectedly, Eagle Mountain 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 Eagle Mountain will offset losses from the drop in Eagle Mountain's long position.| Platinum Asia vs. ChemX Materials | Platinum Asia vs. WiseTech Global Limited | Platinum Asia vs. Energy Technologies Limited | Platinum Asia vs. Mach7 Technologies |
| Eagle Mountain vs. Aeon Metals | Eagle Mountain vs. Homeco Daily Needs | Eagle Mountain vs. Stelar Metals | Eagle Mountain vs. Truscott Mining Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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