Correlation Between Sports Entertainment and Platinum Asset
Can any of the company-specific risk be diversified away by investing in both Sports Entertainment 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 Sports Entertainment and Platinum Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sports Entertainment Group and Platinum Asset Management, you can compare the effects of market volatilities on Sports Entertainment 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 Sports Entertainment with a short position of Platinum Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sports Entertainment and Platinum Asset.
Diversification Opportunities for Sports Entertainment and Platinum Asset
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sports and Platinum is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sports Entertainment 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 Sports Entertainment 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 Sports Entertainment 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 Sports Entertainment i.e., Sports Entertainment and Platinum Asset go up and down completely randomly.
Pair Corralation between Sports Entertainment and Platinum Asset
Assuming the 90 days trading horizon Sports Entertainment Group is expected to under-perform the Platinum Asset. In addition to that, Sports Entertainment is 2.02 times more volatile than Platinum Asset Management. It trades about -0.02 of its total potential returns per unit of risk. Platinum Asset Management is currently generating about -0.03 per unit of volatility. If you would invest 78.00 in Platinum Asset Management on October 18, 2024 and sell it today you would lose (11.00) from holding Platinum Asset Management or give up 14.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sports Entertainment Group vs. Platinum Asset Management
Performance |
| Timeline |
| Sports Entertainment |
| Platinum Asset Management |
Sports Entertainment and Platinum Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sports Entertainment and Platinum Asset
The main advantage of trading using opposite Sports Entertainment and Platinum Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sports Entertainment 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.| Sports Entertainment vs. Platinum Asset Management | Sports Entertainment vs. Aristocrat Leisure | Sports Entertainment vs. Viva Leisure | Sports Entertainment vs. Retail Food Group |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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