Correlation Between Platinum and CPR Gomu
Can any of the company-specific risk be diversified away by investing in both Platinum and CPR Gomu 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 and CPR Gomu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Platinum Group and CPR Gomu Industrial, you can compare the effects of market volatilities on Platinum and CPR Gomu 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 with a short position of CPR Gomu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum and CPR Gomu.
Diversification Opportunities for Platinum and CPR Gomu
Poor diversification
The 3 months correlation between Platinum and CPR is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding The Platinum Group and CPR Gomu Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPR Gomu Industrial and Platinum 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 The Platinum Group are associated (or correlated) with CPR Gomu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPR Gomu Industrial has no effect on the direction of Platinum i.e., Platinum and CPR Gomu go up and down completely randomly.
Pair Corralation between Platinum and CPR Gomu
Assuming the 90 days trading horizon Platinum is expected to generate 3.29 times less return on investment than CPR Gomu. But when comparing it to its historical volatility, The Platinum Group is 1.54 times less risky than CPR Gomu. It trades about 0.11 of its potential returns per unit of risk. CPR Gomu Industrial is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 289.00 in CPR Gomu Industrial on September 13, 2024 and sell it today you would earn a total of 57.00 from holding CPR Gomu Industrial or generate 19.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Platinum Group vs. CPR Gomu Industrial
Performance |
| Timeline |
| Platinum Group |
| CPR Gomu Industrial |
Platinum and CPR Gomu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum and CPR Gomu
The main advantage of trading using opposite Platinum and CPR Gomu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum position performs unexpectedly, CPR Gomu 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 CPR Gomu will offset losses from the drop in CPR Gomu's long position.| Platinum vs. KT Medical Service | Platinum vs. City Sports and | Platinum vs. Thonburi Medical Centre | Platinum vs. Tata Steel Public |
| CPR Gomu vs. Salee Colour Public | CPR Gomu vs. Business Online PCL | CPR Gomu vs. Communication System Solution | CPR Gomu vs. CI Group Public |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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