Correlation Between Platinum Asset and BKI Investment
Can any of the company-specific risk be diversified away by investing in both Platinum Asset and BKI Investment 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 BKI Investment 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 BKI Investment, you can compare the effects of market volatilities on Platinum Asset and BKI Investment 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 BKI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asset and BKI Investment.
Diversification Opportunities for Platinum Asset and BKI Investment
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Platinum and BKI is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management and BKI Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKI Investment 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 BKI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKI Investment has no effect on the direction of Platinum Asset i.e., Platinum Asset and BKI Investment go up and down completely randomly.
Pair Corralation between Platinum Asset and BKI Investment
Assuming the 90 days trading horizon Platinum Asset Management is expected to generate 3.16 times more return on investment than BKI Investment. However, Platinum Asset is 3.16 times more volatile than BKI Investment. It trades about 0.05 of its potential returns per unit of risk. BKI Investment is currently generating about 0.03 per unit of risk. If you would invest 99.00 in Platinum Asset Management on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Platinum Asset Management or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asset Management vs. BKI Investment
Performance |
| Timeline |
| Platinum Asset Management |
| BKI Investment |
Platinum Asset and BKI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asset and BKI Investment
The main advantage of trading using opposite Platinum Asset and BKI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asset position performs unexpectedly, BKI Investment 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 BKI Investment will offset losses from the drop in BKI Investment's long position.| Platinum Asset vs. Champion Iron | Platinum Asset vs. Ridley | Platinum Asset vs. Peel Mining | Platinum Asset vs. Australian Dairy Farms |
| BKI Investment vs. GQG Partners DRC | BKI Investment vs. MFF Capital Investments | BKI Investment vs. Metrics Master Income | BKI Investment vs. Australian United Investment |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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