Correlation Between Platinum Group and Anglo American
Can any of the company-specific risk be diversified away by investing in both Platinum Group and Anglo American 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 Group and Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Group Metals and Anglo American Platinum, you can compare the effects of market volatilities on Platinum Group and Anglo American 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 Group with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Group and Anglo American.
Diversification Opportunities for Platinum Group and Anglo American
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Platinum and Anglo is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Group Metals and Anglo American Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American Platinum and Platinum Group 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 Group Metals are associated (or correlated) with Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American Platinum has no effect on the direction of Platinum Group i.e., Platinum Group and Anglo American go up and down completely randomly.
Pair Corralation between Platinum Group and Anglo American
Considering the 90-day investment horizon Platinum Group Metals is expected to generate 0.99 times more return on investment than Anglo American. However, Platinum Group Metals is 1.01 times less risky than Anglo American. It trades about -0.02 of its potential returns per unit of risk. Anglo American Platinum is currently generating about -0.23 per unit of risk. If you would invest 181.00 in Platinum Group Metals on September 1, 2024 and sell it today you would lose (8.00) from holding Platinum Group Metals or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Group Metals vs. Anglo American Platinum
Performance |
| Timeline |
| Platinum Group Metals |
| Anglo American Platinum |
Platinum Group and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Group and Anglo American
The main advantage of trading using opposite Platinum Group and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Group position performs unexpectedly, Anglo American 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 Anglo American will offset losses from the drop in Anglo American's long position.| Platinum Group vs. Endeavour Silver Corp | Platinum Group vs. Avino Silver Gold | Platinum Group vs. Fortuna Silver Mines | Platinum Group vs. Impala Platinum Holdings |
| Anglo American vs. Defiance Silver Corp | Anglo American vs. HUMANA INC | Anglo American vs. SCOR PK | Anglo American vs. Aquagold International |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |