Correlation Between Platinum Investment and Air New
Can any of the company-specific risk be diversified away by investing in both Platinum Investment and Air New 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 Air New 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 Air New Zealand, you can compare the effects of market volatilities on Platinum Investment and Air New 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 Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Investment and Air New.
Diversification Opportunities for Platinum Investment and Air New
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Platinum and Air is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Investment Management and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand 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 Air New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of Platinum Investment i.e., Platinum Investment and Air New go up and down completely randomly.
Pair Corralation between Platinum Investment and Air New
Assuming the 90 days horizon Platinum Investment Management is expected to generate 2.6 times more return on investment than Air New. However, Platinum Investment is 2.6 times more volatile than Air New Zealand. It trades about -0.02 of its potential returns per unit of risk. Air New Zealand is currently generating about -0.06 per unit of risk. If you would invest 40.00 in Platinum Investment Management on September 22, 2024 and sell it today you would lose (2.00) from holding Platinum Investment Management or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Investment Management vs. Air New Zealand
Performance |
| Timeline |
| Platinum Investment |
| Air New Zealand |
Platinum Investment and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Investment and Air New
The main advantage of trading using opposite Platinum Investment and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Investment position performs unexpectedly, Air New 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 Air New will offset losses from the drop in Air New's long position.| Platinum Investment vs. Blackstone Group | Platinum Investment vs. The Bank of | Platinum Investment vs. Ameriprise Financial | Platinum Investment vs. State Street |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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