Correlation Between Platinum Asset and Regal Investment
Can any of the company-specific risk be diversified away by investing in both Platinum Asset and Regal Investment 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 Regal Investment 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 Regal Investment, you can compare the effects of market volatilities on Platinum Asset and Regal Investment 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 Regal Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asset and Regal Investment.
Diversification Opportunities for Platinum Asset and Regal Investment
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Platinum and Regal is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management and Regal Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Investment 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 Regal Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Investment has no effect on the direction of Platinum Asset i.e., Platinum Asset and Regal Investment go up and down completely randomly.
Pair Corralation between Platinum Asset and Regal Investment
Assuming the 90 days trading horizon Platinum Asset is expected to generate 4.42 times less return on investment than Regal Investment. In addition to that, Platinum Asset is 2.29 times more volatile than Regal Investment. It trades about 0.01 of its total potential returns per unit of risk. Regal Investment is currently generating about 0.13 per unit of volatility. If you would invest 257.00 in Regal Investment on August 29, 2024 and sell it today you would earn a total of 95.00 from holding Regal Investment or generate 36.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asset Management vs. Regal Investment
Performance |
| Timeline |
| Platinum Asset Management |
| Regal Investment |
Platinum Asset and Regal Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asset and Regal Investment
The main advantage of trading using opposite Platinum Asset and Regal Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asset position performs unexpectedly, Regal Investment 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 Regal Investment will offset losses from the drop in Regal Investment's long position.| Platinum Asset vs. Champion Iron | Platinum Asset vs. Ridley | Platinum Asset vs. Peel Mining | Platinum Asset vs. Australian Dairy Farms |
| Regal Investment vs. Embark Education Group | Regal Investment vs. Pinnacle Investment Management | Regal Investment vs. Stelar Metals | Regal Investment vs. Nova Eye Medical |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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