Correlation Between Platinum Asia and RLF AgTech
Can any of the company-specific risk be diversified away by investing in both Platinum Asia and RLF AgTech 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 RLF AgTech 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 RLF AgTech, you can compare the effects of market volatilities on Platinum Asia and RLF AgTech 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 RLF AgTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and RLF AgTech.
Diversification Opportunities for Platinum Asia and RLF AgTech
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Platinum and RLF is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and RLF AgTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLF AgTech 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 RLF AgTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RLF AgTech has no effect on the direction of Platinum Asia i.e., Platinum Asia and RLF AgTech go up and down completely randomly.
Pair Corralation between Platinum Asia and RLF AgTech
Assuming the 90 days trading horizon Platinum Asia Investments is expected to generate 0.3 times more return on investment than RLF AgTech. However, Platinum Asia Investments is 3.3 times less risky than RLF AgTech. It trades about 0.09 of its potential returns per unit of risk. RLF AgTech is currently generating about -0.08 per unit of risk. If you would invest 99.00 in Platinum Asia Investments on September 15, 2024 and sell it today you would earn a total of 2.00 from holding Platinum Asia Investments or generate 2.02% 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. RLF AgTech
Performance |
| Timeline |
| Platinum Asia Investments |
| RLF AgTech |
Platinum Asia and RLF AgTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asia and RLF AgTech
The main advantage of trading using opposite Platinum Asia and RLF AgTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia position performs unexpectedly, RLF AgTech 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 RLF AgTech will offset losses from the drop in RLF AgTech's long position.| Platinum Asia vs. Audio Pixels Holdings | Platinum Asia vs. Iodm | Platinum Asia vs. Nsx | Platinum Asia vs. TTG Fintech |
| RLF AgTech vs. Northern Star Resources | RLF AgTech vs. Evolution Mining | RLF AgTech vs. Bluescope Steel | RLF AgTech vs. Sandfire Resources NL |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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