Correlation Between Retail Food and Platinum Asset
Can any of the company-specific risk be diversified away by investing in both Retail Food and Platinum Asset 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 Retail Food and Platinum Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Food Group and Platinum Asset Management, you can compare the effects of market volatilities on Retail Food and Platinum Asset 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 Retail Food with a short position of Platinum Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Food and Platinum Asset.
Diversification Opportunities for Retail Food and Platinum Asset
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Retail and Platinum is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Retail Food Group and Platinum Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asset Management and Retail Food 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 Retail Food Group are associated (or correlated) with Platinum Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asset Management has no effect on the direction of Retail Food i.e., Retail Food and Platinum Asset go up and down completely randomly.
Pair Corralation between Retail Food and Platinum Asset
Assuming the 90 days trading horizon Retail Food Group is expected to under-perform the Platinum Asset. In addition to that, Retail Food is 1.03 times more volatile than Platinum Asset Management. It trades about -0.05 of its total potential returns per unit of risk. Platinum Asset Management is currently generating about 0.0 per unit of volatility. If you would invest 78.00 in Platinum Asset Management on November 28, 2024 and sell it today you would lose (3.00) from holding Platinum Asset Management or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Food Group vs. Platinum Asset Management
Performance |
| Timeline |
| Retail Food Group |
| Platinum Asset Management |
Retail Food and Platinum Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Food and Platinum Asset
The main advantage of trading using opposite Retail Food and Platinum Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Food position performs unexpectedly, Platinum Asset 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 Asset will offset losses from the drop in Platinum Asset's long position.| Retail Food vs. Pinnacle Investment Management | Retail Food vs. Argo Investments | Retail Food vs. Queste Communications | Retail Food vs. Autosports Group |
| Platinum Asset vs. IDP Education | Platinum Asset vs. BKI Investment | Platinum Asset vs. Mirrabooka Investments | Platinum Asset vs. Argo Investments |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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