Correlation Between Platinum Asset and Mirrabooka Investments
Can any of the company-specific risk be diversified away by investing in both Platinum Asset and Mirrabooka Investments 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 Mirrabooka Investments 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 Mirrabooka Investments, you can compare the effects of market volatilities on Platinum Asset and Mirrabooka Investments 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 Mirrabooka Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asset and Mirrabooka Investments.
Diversification Opportunities for Platinum Asset and Mirrabooka Investments
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Platinum and Mirrabooka is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management and Mirrabooka Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirrabooka Investments 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 Mirrabooka Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirrabooka Investments has no effect on the direction of Platinum Asset i.e., Platinum Asset and Mirrabooka Investments go up and down completely randomly.
Pair Corralation between Platinum Asset and Mirrabooka Investments
Assuming the 90 days trading horizon Platinum Asset Management is expected to generate 2.71 times more return on investment than Mirrabooka Investments. However, Platinum Asset is 2.71 times more volatile than Mirrabooka Investments. It trades about 0.04 of its potential returns per unit of risk. Mirrabooka Investments is currently generating about 0.07 per unit of risk. If you would invest 92.00 in Platinum Asset Management on August 25, 2024 and sell it today you would earn a total of 14.00 from holding Platinum Asset Management or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asset Management vs. Mirrabooka Investments
Performance |
| Timeline |
| Platinum Asset Management |
| Mirrabooka Investments |
Platinum Asset and Mirrabooka Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asset and Mirrabooka Investments
The main advantage of trading using opposite Platinum Asset and Mirrabooka Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asset position performs unexpectedly, Mirrabooka Investments 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 Mirrabooka Investments will offset losses from the drop in Mirrabooka Investments' long position.| Platinum Asset vs. National Australia Bank | Platinum Asset vs. National Australia Bank | Platinum Asset vs. Westpac Banking | Platinum Asset vs. National Australia Bank |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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