Correlation Between Platinum and 2 Year
Can any of the company-specific risk be diversified away by investing in both Platinum and 2 Year 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 2 Year into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum and 2 Year T Note Futures, you can compare the effects of market volatilities on Platinum and 2 Year 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 2 Year. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum and 2 Year.
Diversification Opportunities for Platinum and 2 Year
Significant diversification
The 3 months correlation between Platinum and ZTUSD is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Platinum and 2 Year T Note Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2 Year T 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 Platinum are associated (or correlated) with 2 Year. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2 Year T has no effect on the direction of Platinum i.e., Platinum and 2 Year go up and down completely randomly.
Pair Corralation between Platinum and 2 Year
Assuming the 90 days horizon Platinum is expected to generate 10.97 times more return on investment than 2 Year. However, Platinum is 10.97 times more volatile than 2 Year T Note Futures. It trades about 0.0 of its potential returns per unit of risk. 2 Year T Note Futures is currently generating about 0.0 per unit of risk. If you would invest 100,750 in Platinum on August 26, 2024 and sell it today you would lose (3,780) from holding Platinum or give up 3.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum vs. 2 Year T Note Futures
Performance |
| Timeline |
| Platinum |
| 2 Year T |
Platinum and 2 Year Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum and 2 Year
The main advantage of trading using opposite Platinum and 2 Year positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum position performs unexpectedly, 2 Year 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 2 Year will offset losses from the drop in 2 Year's long position.| Platinum vs. Heating Oil | Platinum vs. Crude Oil | Platinum vs. Aluminum Futures | Platinum vs. Corn Futures |
| 2 Year vs. 30 Year Treasury | 2 Year vs. 30 Day Fed | 2 Year vs. Class III Milk | 2 Year vs. 10 Year T Note Futures |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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