Correlation Between Pinnacle Investment and Platinum Asia
Can any of the company-specific risk be diversified away by investing in both Pinnacle Investment and Platinum Asia 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 Pinnacle Investment and Platinum Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinnacle Investment Management and Platinum Asia Investments, you can compare the effects of market volatilities on Pinnacle Investment and Platinum Asia 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 Pinnacle Investment with a short position of Platinum Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle Investment and Platinum Asia.
Diversification Opportunities for Pinnacle Investment and Platinum Asia
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pinnacle and Platinum is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Investment Management and Platinum Asia Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asia Investments and Pinnacle Investment 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 Pinnacle Investment Management are associated (or correlated) with Platinum Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asia Investments has no effect on the direction of Pinnacle Investment i.e., Pinnacle Investment and Platinum Asia go up and down completely randomly.
Pair Corralation between Pinnacle Investment and Platinum Asia
Assuming the 90 days trading horizon Pinnacle Investment Management is expected to generate 1.52 times more return on investment than Platinum Asia. However, Pinnacle Investment is 1.52 times more volatile than Platinum Asia Investments. It trades about 0.25 of its potential returns per unit of risk. Platinum Asia Investments is currently generating about 0.05 per unit of risk. If you would invest 1,328 in Pinnacle Investment Management on September 1, 2024 and sell it today you would earn a total of 1,016 from holding Pinnacle Investment Management or generate 76.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinnacle Investment Management vs. Platinum Asia Investments
Performance |
| Timeline |
| Pinnacle Investment |
| Platinum Asia Investments |
Pinnacle Investment and Platinum Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinnacle Investment and Platinum Asia
The main advantage of trading using opposite Pinnacle Investment and Platinum Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinnacle Investment position performs unexpectedly, Platinum Asia 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 Platinum Asia will offset losses from the drop in Platinum Asia's long position.| Pinnacle Investment vs. WA1 Resources | Pinnacle Investment vs. Predictive Discovery | Pinnacle Investment vs. Cooper Metals | Pinnacle Investment vs. OD6 Metals |
| Platinum Asia vs. Navigator Global Investments | Platinum Asia vs. Diversified United Investment | Platinum Asia vs. Garda Diversified Ppty | Platinum Asia vs. Argo Investments |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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