Correlation Between Platinum Asset and Falcon Metals
Can any of the company-specific risk be diversified away by investing in both Platinum Asset and Falcon Metals 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 Falcon Metals 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 Falcon Metals, you can compare the effects of market volatilities on Platinum Asset and Falcon Metals 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 Falcon Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asset and Falcon Metals.
Diversification Opportunities for Platinum Asset and Falcon Metals
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Platinum and Falcon is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management and Falcon Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Metals 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 Falcon Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Metals has no effect on the direction of Platinum Asset i.e., Platinum Asset and Falcon Metals go up and down completely randomly.
Pair Corralation between Platinum Asset and Falcon Metals
Assuming the 90 days trading horizon Platinum Asset Management is expected to under-perform the Falcon Metals. But the stock apears to be less risky and, when comparing its historical volatility, Platinum Asset Management is 2.76 times less risky than Falcon Metals. The stock trades about -0.04 of its potential returns per unit of risk. The Falcon Metals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Falcon Metals on October 13, 2024 and sell it today you would lose (13.00) from holding Falcon Metals or give up 50.0% 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. Falcon Metals
Performance |
| Timeline |
| Platinum Asset Management |
| Falcon Metals |
Platinum Asset and Falcon Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asset and Falcon Metals
The main advantage of trading using opposite Platinum Asset and Falcon Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asset position performs unexpectedly, Falcon Metals 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 Falcon Metals will offset losses from the drop in Falcon Metals' long position.| Platinum Asset vs. Saferoads Holdings | Platinum Asset vs. Kip McGrath Education | Platinum Asset vs. Charter Hall Retail | Platinum Asset vs. Data3 |
| Falcon Metals vs. Platinum Asset Management | Falcon Metals vs. Gold Road Resources | Falcon Metals vs. Commonwealth Bank of | Falcon Metals vs. Wt Financial Group |
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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