Correlation Between Platinum Asset and Globe Metals
Can any of the company-specific risk be diversified away by investing in both Platinum Asset and Globe 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 Globe 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 Globe Metals Mining, you can compare the effects of market volatilities on Platinum Asset and Globe 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 Globe Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asset and Globe Metals.
Diversification Opportunities for Platinum Asset and Globe Metals
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Platinum and Globe is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management and Globe Metals Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Metals Mining 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 Globe Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Metals Mining has no effect on the direction of Platinum Asset i.e., Platinum Asset and Globe Metals go up and down completely randomly.
Pair Corralation between Platinum Asset and Globe Metals
Assuming the 90 days trading horizon Platinum Asset Management is expected to generate 0.54 times more return on investment than Globe Metals. However, Platinum Asset Management is 1.86 times less risky than Globe Metals. It trades about -0.06 of its potential returns per unit of risk. Globe Metals Mining is currently generating about -0.27 per unit of risk. If you would invest 71.00 in Platinum Asset Management on November 8, 2024 and sell it today you would lose (2.00) from holding Platinum Asset Management or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asset Management vs. Globe Metals Mining
Performance |
| Timeline |
| Platinum Asset Management |
| Globe Metals Mining |
Platinum Asset and Globe Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asset and Globe Metals
The main advantage of trading using opposite Platinum Asset and Globe Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asset position performs unexpectedly, Globe 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 Globe Metals will offset losses from the drop in Globe Metals' long position.| Platinum Asset vs. Truscott Mining Corp | Platinum Asset vs. Spirit Telecom | Platinum Asset vs. M3 Mining | Platinum Asset vs. Black Rock Mining |
| Globe Metals vs. My Foodie Box | Globe Metals vs. Sayona Mining | Globe Metals vs. MetalsGrove Mining | Globe Metals vs. Rare Foods Australia |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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