Correlation Between Platinum Asia and FSA
Can any of the company-specific risk be diversified away by investing in both Platinum Asia and FSA 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 FSA 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 FSA Group, you can compare the effects of market volatilities on Platinum Asia and FSA 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 FSA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and FSA.
Diversification Opportunities for Platinum Asia and FSA
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Platinum and FSA is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and FSA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSA Group 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 FSA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSA Group has no effect on the direction of Platinum Asia i.e., Platinum Asia and FSA go up and down completely randomly.
Pair Corralation between Platinum Asia and FSA
Assuming the 90 days trading horizon Platinum Asia Investments is expected to under-perform the FSA. In addition to that, Platinum Asia is 1.14 times more volatile than FSA Group. It trades about -0.22 of its total potential returns per unit of risk. FSA Group is currently generating about -0.17 per unit of volatility. If you would invest 84.00 in FSA Group on September 5, 2024 and sell it today you would lose (4.00) from holding FSA Group or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asia Investments vs. FSA Group
Performance |
| Timeline |
| Platinum Asia Investments |
| FSA Group |
Platinum Asia and FSA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asia and FSA
The main advantage of trading using opposite Platinum Asia and FSA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia position performs unexpectedly, FSA 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 FSA will offset losses from the drop in FSA's long position.| Platinum Asia vs. Westpac Banking | Platinum Asia vs. Ecofibre | Platinum Asia vs. Adriatic Metals Plc | Platinum Asia vs. Australian Dairy Farms |
| FSA vs. Australian United Investment | FSA vs. Platinum Asia Investments | FSA vs. COAST ENTERTAINMENT HOLDINGS | FSA vs. REGAL ASIAN INVESTMENTS |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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