Correlation Between Platinum Asia and Hub24
Can any of the company-specific risk be diversified away by investing in both Platinum Asia and Hub24 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 Hub24 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 Hub24, you can compare the effects of market volatilities on Platinum Asia and Hub24 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 Hub24. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and Hub24.
Diversification Opportunities for Platinum Asia and Hub24
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Platinum and Hub24 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and Hub24 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hub24 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 Hub24. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hub24 has no effect on the direction of Platinum Asia i.e., Platinum Asia and Hub24 go up and down completely randomly.
Pair Corralation between Platinum Asia and Hub24
Assuming the 90 days trading horizon Platinum Asia Investments is expected to under-perform the Hub24. In addition to that, Platinum Asia is 1.03 times more volatile than Hub24. It trades about -0.23 of its total potential returns per unit of risk. Hub24 is currently generating about 0.36 per unit of volatility. If you would invest 6,775 in Hub24 on August 26, 2024 and sell it today you would earn a total of 712.00 from holding Hub24 or generate 10.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asia Investments vs. Hub24
Performance |
| Timeline |
| Platinum Asia Investments |
| Hub24 |
Platinum Asia and Hub24 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asia and Hub24
The main advantage of trading using opposite Platinum Asia and Hub24 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia position performs unexpectedly, Hub24 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 Hub24 will offset losses from the drop in Hub24's long position.| Platinum Asia vs. Carlton Investments | Platinum Asia vs. Clime Investment Management | Platinum Asia vs. Sandon Capital Investments | Platinum Asia vs. BKI Investment |
| Hub24 vs. A1 Investments Resources | Hub24 vs. Argo Investments | Hub24 vs. Sandon Capital Investments | Hub24 vs. Platinum Asia 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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