Correlation Between Platinum Investment and TELECOM PLUS
Can any of the company-specific risk be diversified away by investing in both Platinum Investment and TELECOM PLUS 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 TELECOM PLUS 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 TELECOM PLUS PLC, you can compare the effects of market volatilities on Platinum Investment and TELECOM PLUS 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 TELECOM PLUS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Investment and TELECOM PLUS.
Diversification Opportunities for Platinum Investment and TELECOM PLUS
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Platinum and TELECOM is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Investment Management and TELECOM PLUS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELECOM PLUS 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 TELECOM PLUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELECOM PLUS PLC has no effect on the direction of Platinum Investment i.e., Platinum Investment and TELECOM PLUS go up and down completely randomly.
Pair Corralation between Platinum Investment and TELECOM PLUS
Assuming the 90 days horizon Platinum Investment Management is expected to generate 1.2 times more return on investment than TELECOM PLUS. However, Platinum Investment is 1.2 times more volatile than TELECOM PLUS PLC. It trades about 0.19 of its potential returns per unit of risk. TELECOM PLUS PLC is currently generating about -0.02 per unit of risk. If you would invest 38.00 in Platinum Investment Management on October 21, 2024 and sell it today you would earn a total of 3.00 from holding Platinum Investment Management or generate 7.89% 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. TELECOM PLUS PLC
Performance |
| Timeline |
| Platinum Investment |
| TELECOM PLUS PLC |
Platinum Investment and TELECOM PLUS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Investment and TELECOM PLUS
The main advantage of trading using opposite Platinum Investment and TELECOM PLUS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Investment position performs unexpectedly, TELECOM PLUS 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 TELECOM PLUS will offset losses from the drop in TELECOM PLUS's long position.| Platinum Investment vs. Chunghwa Telecom Co | Platinum Investment vs. GOODYEAR T RUBBER | Platinum Investment vs. Shenandoah Telecommunications | Platinum Investment vs. Singapore Telecommunications Limited |
| TELECOM PLUS vs. IBERDROLA ADR1 EO | TELECOM PLUS vs. SSE PLC ADR | TELECOM PLUS vs. C PARAN EN | TELECOM PLUS vs. CIA ENGER ADR |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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