Correlation Between Platinum Asset and Nanosonics
Can any of the company-specific risk be diversified away by investing in both Platinum Asset and Nanosonics 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 Nanosonics 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 Nanosonics, you can compare the effects of market volatilities on Platinum Asset and Nanosonics 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 Nanosonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asset and Nanosonics.
Diversification Opportunities for Platinum Asset and Nanosonics
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Platinum and Nanosonics is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management and Nanosonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanosonics 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 Nanosonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanosonics has no effect on the direction of Platinum Asset i.e., Platinum Asset and Nanosonics go up and down completely randomly.
Pair Corralation between Platinum Asset and Nanosonics
Assuming the 90 days trading horizon Platinum Asset Management is expected to under-perform the Nanosonics. But the stock apears to be less risky and, when comparing its historical volatility, Platinum Asset Management is 1.22 times less risky than Nanosonics. The stock trades about -0.02 of its potential returns per unit of risk. The Nanosonics is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 455.00 in Nanosonics on September 4, 2024 and sell it today you would lose (133.00) from holding Nanosonics or give up 29.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asset Management vs. Nanosonics
Performance |
| Timeline |
| Platinum Asset Management |
| Nanosonics |
Platinum Asset and Nanosonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asset and Nanosonics
The main advantage of trading using opposite Platinum Asset and Nanosonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asset position performs unexpectedly, Nanosonics 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 Nanosonics will offset losses from the drop in Nanosonics' long position.| Platinum Asset vs. Westpac Banking | Platinum Asset vs. Ecofibre | Platinum Asset vs. Adriatic Metals Plc | Platinum Asset vs. Australian Dairy Farms |
| Nanosonics vs. Nine Entertainment Co | Nanosonics vs. Vulcan Steel | Nanosonics vs. Tombador Iron | Nanosonics vs. Bluescope Steel |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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