Correlation Between Platinum Group and Fresnillo PLC
Can any of the company-specific risk be diversified away by investing in both Platinum Group and Fresnillo PLC 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 Fresnillo PLC 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 Fresnillo PLC, you can compare the effects of market volatilities on Platinum Group and Fresnillo PLC 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 Fresnillo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Group and Fresnillo PLC.
Diversification Opportunities for Platinum Group and Fresnillo PLC
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Platinum and Fresnillo is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Group Metals and Fresnillo PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresnillo PLC 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 Fresnillo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresnillo PLC has no effect on the direction of Platinum Group i.e., Platinum Group and Fresnillo PLC go up and down completely randomly.
Pair Corralation between Platinum Group and Fresnillo PLC
Considering the 90-day investment horizon Platinum Group Metals is expected to generate 1.43 times more return on investment than Fresnillo PLC. However, Platinum Group is 1.43 times more volatile than Fresnillo PLC. It trades about 0.02 of its potential returns per unit of risk. Fresnillo PLC is currently generating about 0.0 per unit of risk. If you would invest 175.00 in Platinum Group Metals on August 26, 2024 and sell it today you would earn a total of 4.00 from holding Platinum Group Metals or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
Platinum Group Metals vs. Fresnillo PLC
Performance |
| Timeline |
| Platinum Group Metals |
| Fresnillo PLC |
Platinum Group and Fresnillo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Group and Fresnillo PLC
The main advantage of trading using opposite Platinum Group and Fresnillo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Group position performs unexpectedly, Fresnillo PLC 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 Fresnillo PLC will offset losses from the drop in Fresnillo PLC's long position.| Platinum Group vs. Hecla Mining | Platinum Group vs. SilverCrest Metals | Platinum Group vs. McEwen Mining | Platinum Group vs. Metalla Royalty Streaming |
| Fresnillo PLC vs. Impala Platinum Holdings | Fresnillo PLC vs. Anglo American Platinum | Fresnillo PLC vs. Platinum Group Metals | Fresnillo PLC vs. AbraSilver Resource Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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