Correlation Between Platinum Investment and Aedas Homes
Can any of the company-specific risk be diversified away by investing in both Platinum Investment and Aedas Homes 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 Investment and Aedas Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Investment Management and Aedas Homes SA, you can compare the effects of market volatilities on Platinum Investment and Aedas Homes 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 Investment with a short position of Aedas Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Investment and Aedas Homes.
Diversification Opportunities for Platinum Investment and Aedas Homes
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Platinum and Aedas is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Investment Management and Aedas Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedas Homes SA and Platinum Investment 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 Investment Management are associated (or correlated) with Aedas Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aedas Homes SA has no effect on the direction of Platinum Investment i.e., Platinum Investment and Aedas Homes go up and down completely randomly.
Pair Corralation between Platinum Investment and Aedas Homes
Assuming the 90 days horizon Platinum Investment Management is expected to under-perform the Aedas Homes. In addition to that, Platinum Investment is 3.02 times more volatile than Aedas Homes SA. It trades about -0.28 of its total potential returns per unit of risk. Aedas Homes SA is currently generating about -0.03 per unit of volatility. If you would invest 2,515 in Aedas Homes SA on September 14, 2024 and sell it today you would lose (25.00) from holding Aedas Homes SA or give up 0.99% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Platinum Investment Management vs. Aedas Homes SA
Performance |
Timeline |
Platinum Investment |
Aedas Homes SA |
Platinum Investment and Aedas Homes Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Platinum Investment and Aedas Homes
The main advantage of trading using opposite Platinum Investment and Aedas Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Investment position performs unexpectedly, Aedas Homes 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 Aedas Homes will offset losses from the drop in Aedas Homes' long position.Platinum Investment vs. Ameriprise Financial | Platinum Investment vs. Ares Management Corp | Platinum Investment vs. Superior Plus Corp | Platinum Investment vs. SIVERS SEMICONDUCTORS AB |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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