Correlation Between Platinum Group and Arctic Star
Can any of the company-specific risk be diversified away by investing in both Platinum Group and Arctic Star 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 Arctic Star 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 Arctic Star Exploration, you can compare the effects of market volatilities on Platinum Group and Arctic Star 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 Arctic Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Group and Arctic Star.
Diversification Opportunities for Platinum Group and Arctic Star
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Platinum and Arctic is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Group Metals and Arctic Star Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Star Exploration 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 Arctic Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Star Exploration has no effect on the direction of Platinum Group i.e., Platinum Group and Arctic Star go up and down completely randomly.
Pair Corralation between Platinum Group and Arctic Star
Considering the 90-day investment horizon Platinum Group Metals is expected to generate 1.22 times more return on investment than Arctic Star. However, Platinum Group is 1.22 times more volatile than Arctic Star Exploration. It trades about 0.08 of its potential returns per unit of risk. Arctic Star Exploration is currently generating about -0.03 per unit of risk. If you would invest 143.00 in Platinum Group Metals on August 30, 2024 and sell it today you would earn a total of 19.00 from holding Platinum Group Metals or generate 13.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Platinum Group Metals vs. Arctic Star Exploration
Performance |
| Timeline |
| Platinum Group Metals |
| Arctic Star Exploration |
Platinum Group and Arctic Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Group and Arctic Star
The main advantage of trading using opposite Platinum Group and Arctic Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Group position performs unexpectedly, Arctic Star 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 Arctic Star will offset losses from the drop in Arctic Star'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 |
| Arctic Star vs. American Sierra Gold | Arctic Star vs. Aurania Resources | Arctic Star vs. Alien Metals | Arctic Star vs. Gold79 Mines |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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