Correlation Between Platinum Asset and Enegex NL
Can any of the company-specific risk be diversified away by investing in both Platinum Asset and Enegex NL 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 Enegex NL 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 Enegex NL, you can compare the effects of market volatilities on Platinum Asset and Enegex NL 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 Enegex NL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asset and Enegex NL.
Diversification Opportunities for Platinum Asset and Enegex NL
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Platinum and Enegex is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management and Enegex NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enegex NL 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 Enegex NL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enegex NL has no effect on the direction of Platinum Asset i.e., Platinum Asset and Enegex NL go up and down completely randomly.
Pair Corralation between Platinum Asset and Enegex NL
Assuming the 90 days trading horizon Platinum Asset Management is expected to under-perform the Enegex NL. But the stock apears to be less risky and, when comparing its historical volatility, Platinum Asset Management is 1.23 times less risky than Enegex NL. The stock trades about -0.43 of its potential returns per unit of risk. The Enegex NL is currently generating about -0.31 of returns per unit of risk over similar time horizon. If you would invest 1.60 in Enegex NL on September 5, 2024 and sell it today you would lose (0.20) from holding Enegex NL or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Platinum Asset Management vs. Enegex NL
Performance |
| Timeline |
| Platinum Asset Management |
| Enegex NL |
Platinum Asset and Enegex NL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asset and Enegex NL
The main advantage of trading using opposite Platinum Asset and Enegex NL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asset position performs unexpectedly, Enegex NL 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 Enegex NL will offset losses from the drop in Enegex NL's long position.| Platinum Asset vs. Westpac Banking | Platinum Asset vs. Ecofibre | Platinum Asset vs. Adriatic Metals Plc | Platinum Asset vs. Australian Dairy Farms |
| Enegex NL vs. Queste Communications | Enegex NL vs. K2 Asset Management | Enegex NL vs. Singular Health Group | Enegex NL 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |