Correlation Between Platinum Asia and Macquarie
Can any of the company-specific risk be diversified away by investing in both Platinum Asia and Macquarie 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 Macquarie 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 Macquarie Group, you can compare the effects of market volatilities on Platinum Asia and Macquarie 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 Macquarie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and Macquarie.
Diversification Opportunities for Platinum Asia and Macquarie
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Platinum and Macquarie is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and Macquarie Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie 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 Macquarie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Group has no effect on the direction of Platinum Asia i.e., Platinum Asia and Macquarie go up and down completely randomly.
Pair Corralation between Platinum Asia and Macquarie
Assuming the 90 days trading horizon Platinum Asia is expected to generate 2.05 times less return on investment than Macquarie. In addition to that, Platinum Asia is 1.09 times more volatile than Macquarie Group. It trades about 0.06 of its total potential returns per unit of risk. Macquarie Group is currently generating about 0.14 per unit of volatility. If you would invest 15,279 in Macquarie Group on August 25, 2024 and sell it today you would earn a total of 7,878 from holding Macquarie Group or generate 51.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asia Investments vs. Macquarie Group
Performance |
| Timeline |
| Platinum Asia Investments |
| Macquarie Group |
Platinum Asia and Macquarie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asia and Macquarie
The main advantage of trading using opposite Platinum Asia and Macquarie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia position performs unexpectedly, Macquarie 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 Macquarie will offset losses from the drop in Macquarie's long position.| Platinum Asia vs. Garda Diversified Ppty | Platinum Asia vs. Computershare | Platinum Asia vs. MFF Capital Investments | Platinum Asia vs. Alto Metals |
| Macquarie vs. Argo Investments | Macquarie vs. REGAL ASIAN INVESTMENTS | Macquarie vs. Platinum Asia Investments | Macquarie vs. COAST ENTERTAINMENT HOLDINGS |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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