Correlation Between Platinum Investment and Illinois Tool
Can any of the company-specific risk be diversified away by investing in both Platinum Investment and Illinois Tool 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 Illinois Tool 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 Illinois Tool Works, you can compare the effects of market volatilities on Platinum Investment and Illinois Tool 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 Illinois Tool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Investment and Illinois Tool.
Diversification Opportunities for Platinum Investment and Illinois Tool
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Platinum and Illinois is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Investment Management and Illinois Tool Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Illinois Tool Works 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 Illinois Tool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Illinois Tool Works has no effect on the direction of Platinum Investment i.e., Platinum Investment and Illinois Tool go up and down completely randomly.
Pair Corralation between Platinum Investment and Illinois Tool
Assuming the 90 days horizon Platinum Investment Management is expected to generate 2.41 times more return on investment than Illinois Tool. However, Platinum Investment is 2.41 times more volatile than Illinois Tool Works. It trades about 0.05 of its potential returns per unit of risk. Illinois Tool Works is currently generating about 0.11 per unit of risk. If you would invest 43.00 in Platinum Investment Management on November 27, 2024 and sell it today you would earn a total of 1.00 from holding Platinum Investment Management or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Investment Management vs. Illinois Tool Works
Performance |
| Timeline |
| Platinum Investment |
| Illinois Tool Works |
Platinum Investment and Illinois Tool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Investment and Illinois Tool
The main advantage of trading using opposite Platinum Investment and Illinois Tool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Investment position performs unexpectedly, Illinois Tool 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 Illinois Tool will offset losses from the drop in Illinois Tool's long position.| Platinum Investment vs. TITAN MACHINERY | Platinum Investment vs. Endeavour Mining PLC | Platinum Investment vs. GALENA MINING LTD | Platinum Investment vs. Tokyu Construction Co |
| Illinois Tool vs. SBM OFFSHORE | Illinois Tool vs. FLOW TRADERS LTD | Illinois Tool vs. EIDESVIK OFFSHORE NK | Illinois Tool vs. SIEM OFFSHORE NEW |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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