Correlation Between Platinum Asia and REGAL ASIAN
Can any of the company-specific risk be diversified away by investing in both Platinum Asia and REGAL ASIAN 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 REGAL ASIAN 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 REGAL ASIAN INVESTMENTS, you can compare the effects of market volatilities on Platinum Asia and REGAL ASIAN 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 REGAL ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and REGAL ASIAN.
Diversification Opportunities for Platinum Asia and REGAL ASIAN
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Platinum and REGAL is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and REGAL ASIAN INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL ASIAN INVESTMENTS 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 REGAL ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL ASIAN INVESTMENTS has no effect on the direction of Platinum Asia i.e., Platinum Asia and REGAL ASIAN go up and down completely randomly.
Pair Corralation between Platinum Asia and REGAL ASIAN
Assuming the 90 days trading horizon Platinum Asia is expected to generate 1.33 times less return on investment than REGAL ASIAN. But when comparing it to its historical volatility, Platinum Asia Investments is 1.37 times less risky than REGAL ASIAN. It trades about 0.06 of its potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 201.00 in REGAL ASIAN INVESTMENTS on August 28, 2024 and sell it today you would earn a total of 11.00 from holding REGAL ASIAN INVESTMENTS or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asia Investments vs. REGAL ASIAN INVESTMENTS
Performance |
| Timeline |
| Platinum Asia Investments |
| REGAL ASIAN INVESTMENTS |
Platinum Asia and REGAL ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asia and REGAL ASIAN
The main advantage of trading using opposite Platinum Asia and REGAL ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia position performs unexpectedly, REGAL ASIAN 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 REGAL ASIAN will offset losses from the drop in REGAL ASIAN's long position.| Platinum Asia vs. Stelar Metals | Platinum Asia vs. Centaurus Metals | Platinum Asia vs. Perseus Mining | Platinum Asia vs. Regal Funds Management |
| REGAL ASIAN vs. ABACUS STORAGE KING | REGAL ASIAN vs. Odyssey Energy | REGAL ASIAN vs. Hotel Property Investments | REGAL ASIAN vs. Origin Energy |
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 Stocks Directory module to find actively traded stocks across global markets.
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