Correlation Between Platinum Investment and Safestore Holdings
Can any of the company-specific risk be diversified away by investing in both Platinum Investment and Safestore Holdings 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 Safestore Holdings 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 Safestore Holdings plc, you can compare the effects of market volatilities on Platinum Investment and Safestore Holdings 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 Safestore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Investment and Safestore Holdings.
Diversification Opportunities for Platinum Investment and Safestore Holdings
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Platinum and Safestore is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Investment Management and Safestore Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safestore Holdings plc 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 Safestore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safestore Holdings plc has no effect on the direction of Platinum Investment i.e., Platinum Investment and Safestore Holdings go up and down completely randomly.
Pair Corralation between Platinum Investment and Safestore Holdings
Assuming the 90 days horizon Platinum Investment Management is expected to generate 1.03 times more return on investment than Safestore Holdings. However, Platinum Investment is 1.03 times more volatile than Safestore Holdings plc. It trades about 0.19 of its potential returns per unit of risk. Safestore Holdings plc is currently generating about -0.12 per unit of risk. If you would invest 37.00 in Platinum Investment Management on October 18, 2024 and sell it today you would earn a total of 3.00 from holding Platinum Investment Management or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Investment Management vs. Safestore Holdings plc
Performance |
| Timeline |
| Platinum Investment |
| Safestore Holdings plc |
Platinum Investment and Safestore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Investment and Safestore Holdings
The main advantage of trading using opposite Platinum Investment and Safestore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Investment position performs unexpectedly, Safestore Holdings 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 Safestore Holdings will offset losses from the drop in Safestore Holdings' long position.| Platinum Investment vs. alstria office REIT AG | Platinum Investment vs. British American Tobacco | Platinum Investment vs. CENTURIA OFFICE REIT | Platinum Investment vs. SPORTING |
| Safestore Holdings vs. China Datang | Safestore Holdings vs. CN DATANG C | Safestore Holdings vs. AGF Management Limited | Safestore Holdings vs. Platinum Investment Management |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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