Correlation Between Platinum Asset and Energy Technologies
Can any of the company-specific risk be diversified away by investing in both Platinum Asset and Energy Technologies 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 Energy Technologies 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 Energy Technologies Limited, you can compare the effects of market volatilities on Platinum Asset and Energy Technologies 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 Energy Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asset and Energy Technologies.
Diversification Opportunities for Platinum Asset and Energy Technologies
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Platinum and Energy is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management and Energy Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Technologies 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 Energy Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Technologies has no effect on the direction of Platinum Asset i.e., Platinum Asset and Energy Technologies go up and down completely randomly.
Pair Corralation between Platinum Asset and Energy Technologies
Assuming the 90 days trading horizon Platinum Asset Management is expected to under-perform the Energy Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Platinum Asset Management is 1.11 times less risky than Energy Technologies. The stock trades about -0.09 of its potential returns per unit of risk. The Energy Technologies Limited is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3.10 in Energy Technologies Limited on October 30, 2024 and sell it today you would lose (0.10) from holding Energy Technologies Limited or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asset Management vs. Energy Technologies Limited
Performance |
| Timeline |
| Platinum Asset Management |
| Energy Technologies |
Platinum Asset and Energy Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asset and Energy Technologies
The main advantage of trading using opposite Platinum Asset and Energy Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asset position performs unexpectedly, Energy Technologies 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 Energy Technologies will offset losses from the drop in Energy Technologies' long position.| Platinum Asset vs. Pearl Gull Iron | Platinum Asset vs. Thorney Technologies | Platinum Asset vs. Genetic Technologies | Platinum Asset vs. Ras Technology Holdings |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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