Correlation Between Gasoline RBOB and Platinum
Can any of the company-specific risk be diversified away by investing in both Gasoline RBOB and Platinum 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 Gasoline RBOB and Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gasoline RBOB and Platinum, you can compare the effects of market volatilities on Gasoline RBOB and Platinum 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 Gasoline RBOB with a short position of Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gasoline RBOB and Platinum.
Diversification Opportunities for Gasoline RBOB and Platinum
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gasoline and Platinum is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Gasoline RBOB and Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum and Gasoline RBOB 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 Gasoline RBOB are associated (or correlated) with Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum has no effect on the direction of Gasoline RBOB i.e., Gasoline RBOB and Platinum go up and down completely randomly.
Pair Corralation between Gasoline RBOB and Platinum
Assuming the 90 days horizon Gasoline RBOB is expected to generate 1.34 times more return on investment than Platinum. However, Gasoline RBOB is 1.34 times more volatile than Platinum. It trades about 0.0 of its potential returns per unit of risk. Platinum is currently generating about 0.0 per unit of risk. If you would invest 220.00 in Gasoline RBOB on August 25, 2024 and sell it today you would lose (19.00) from holding Gasoline RBOB or give up 8.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gasoline RBOB vs. Platinum
Performance |
| Timeline |
| Gasoline RBOB |
| Platinum |
Gasoline RBOB and Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gasoline RBOB and Platinum
The main advantage of trading using opposite Gasoline RBOB and Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gasoline RBOB position performs unexpectedly, Platinum 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 Platinum will offset losses from the drop in Platinum's long position.| Gasoline RBOB vs. Crude Oil | Gasoline RBOB vs. Aluminum Futures | Gasoline RBOB vs. Corn Futures | Gasoline RBOB vs. Silver Futures |
| Platinum vs. Heating Oil | Platinum vs. Crude Oil | Platinum vs. Aluminum Futures | Platinum vs. Corn Futures |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |