Correlation Between Platinum Group and Gold Royalty
Can any of the company-specific risk be diversified away by investing in both Platinum Group and Gold Royalty 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 Gold Royalty 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 Gold Royalty Corp, you can compare the effects of market volatilities on Platinum Group and Gold Royalty 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 Gold Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Group and Gold Royalty.
Diversification Opportunities for Platinum Group and Gold Royalty
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Platinum and Gold is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Group Metals and Gold Royalty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Royalty Corp 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 Gold Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Royalty Corp has no effect on the direction of Platinum Group i.e., Platinum Group and Gold Royalty go up and down completely randomly.
Pair Corralation between Platinum Group and Gold Royalty
Considering the 90-day investment horizon Platinum Group Metals is expected to under-perform the Gold Royalty. In addition to that, Platinum Group is 1.92 times more volatile than Gold Royalty Corp. It trades about -0.01 of its total potential returns per unit of risk. Gold Royalty Corp is currently generating about 0.13 per unit of volatility. If you would invest 125.00 in Gold Royalty Corp on November 4, 2024 and sell it today you would earn a total of 7.00 from holding Gold Royalty Corp or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Group Metals vs. Gold Royalty Corp
Performance |
| Timeline |
| Platinum Group Metals |
| Gold Royalty Corp |
Platinum Group and Gold Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Group and Gold Royalty
The main advantage of trading using opposite Platinum Group and Gold Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Group position performs unexpectedly, Gold Royalty 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 Gold Royalty will offset losses from the drop in Gold Royalty'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 |
| Gold Royalty vs. Endeavour Silver Corp | Gold Royalty vs. SilverCrest Metals | Gold Royalty vs. Platinum Group Metals | Gold Royalty vs. New Pacific Metals |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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