Correlation Between Platinum Asset and Australian Dollar
Can any of the company-specific risk be diversified away by investing in both Platinum Asset and Australian Dollar 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 Asset and Australian Dollar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Asset Management and Australian Dollar Currency, you can compare the effects of market volatilities on Platinum Asset and Australian Dollar 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 Asset with a short position of Australian Dollar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asset and Australian Dollar.
Diversification Opportunities for Platinum Asset and Australian Dollar
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Platinum and Australian is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management and Australian Dollar Currency in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Dollar and Platinum Asset 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 Asset Management are associated (or correlated) with Australian Dollar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Dollar has no effect on the direction of Platinum Asset i.e., Platinum Asset and Australian Dollar go up and down completely randomly.
Pair Corralation between Platinum Asset and Australian Dollar
Assuming the 90 days trading horizon Platinum Asset Management is expected to under-perform the Australian Dollar. In addition to that, Platinum Asset is 7.51 times more volatile than Australian Dollar Currency. It trades about -0.28 of its total potential returns per unit of risk. Australian Dollar Currency is currently generating about -0.2 per unit of volatility. If you would invest 6,240 in Australian Dollar Currency on September 13, 2024 and sell it today you would lose (190.00) from holding Australian Dollar Currency or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asset Management vs. Australian Dollar Currency
Performance |
| Timeline |
Platinum Asset and Australian Dollar Volatility Contrast
Predicted Return Density |
| Returns |
Platinum Asset Management
Pair trading matchups for Platinum Asset
Australian Dollar Currency
Pair trading matchups for Australian Dollar
Pair Trading with Platinum Asset and Australian Dollar
The main advantage of trading using opposite Platinum Asset and Australian Dollar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asset position performs unexpectedly, Australian Dollar 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 Australian Dollar will offset losses from the drop in Australian Dollar's long position.| Platinum Asset vs. Collins Foods | Platinum Asset vs. BTC Health Limited | Platinum Asset vs. Health and Plant | Platinum Asset vs. Sonic Healthcare |
| Australian Dollar vs. Black Rock Mining | Australian Dollar vs. Perseus Mining | Australian Dollar vs. Treasury Wine Estates | Australian Dollar vs. Platinum Asset Management |
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 CEOs Directory module to screen CEOs from public companies around the world.
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