Correlation Between Platinum Investment and Kaufman Broad
Can any of the company-specific risk be diversified away by investing in both Platinum Investment and Kaufman Broad 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 Kaufman Broad 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 Kaufman Broad SA, you can compare the effects of market volatilities on Platinum Investment and Kaufman Broad 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 Kaufman Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Investment and Kaufman Broad.
Diversification Opportunities for Platinum Investment and Kaufman Broad
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Platinum and Kaufman is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Investment Management and Kaufman Broad SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaufman Broad 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 Kaufman Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaufman Broad SA has no effect on the direction of Platinum Investment i.e., Platinum Investment and Kaufman Broad go up and down completely randomly.
Pair Corralation between Platinum Investment and Kaufman Broad
Assuming the 90 days horizon Platinum Investment Management is expected to under-perform the Kaufman Broad. In addition to that, Platinum Investment is 1.54 times more volatile than Kaufman Broad SA. It trades about -0.01 of its total potential returns per unit of risk. Kaufman Broad SA is currently generating about 0.04 per unit of volatility. If you would invest 2,476 in Kaufman Broad SA on October 13, 2024 and sell it today you would earn a total of 779.00 from holding Kaufman Broad SA or generate 31.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Platinum Investment Management vs. Kaufman Broad SA
Performance |
| Timeline |
| Platinum Investment |
| Kaufman Broad SA |
Platinum Investment and Kaufman Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Investment and Kaufman Broad
The main advantage of trading using opposite Platinum Investment and Kaufman Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Investment position performs unexpectedly, Kaufman Broad 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 Kaufman Broad will offset losses from the drop in Kaufman Broad's long position.| Platinum Investment vs. Cairo Communication SpA | Platinum Investment vs. T Mobile | Platinum Investment vs. GEELY AUTOMOBILE | Platinum Investment vs. Yuexiu Transport Infrastructure |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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