Correlation Between Stelar Metals and Platinum Asia
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Platinum Asia 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 Stelar Metals and Platinum Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Platinum Asia Investments, you can compare the effects of market volatilities on Stelar Metals and Platinum Asia 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 Stelar Metals with a short position of Platinum Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Platinum Asia.
Diversification Opportunities for Stelar Metals and Platinum Asia
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stelar and Platinum is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Platinum Asia Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asia Investments and Stelar Metals 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 Stelar Metals are associated (or correlated) with Platinum Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asia Investments has no effect on the direction of Stelar Metals i.e., Stelar Metals and Platinum Asia go up and down completely randomly.
Pair Corralation between Stelar Metals and Platinum Asia
Assuming the 90 days trading horizon Stelar Metals is expected to under-perform the Platinum Asia. In addition to that, Stelar Metals is 2.24 times more volatile than Platinum Asia Investments. It trades about -0.26 of its total potential returns per unit of risk. Platinum Asia Investments is currently generating about -0.22 per unit of volatility. If you would invest 105.00 in Platinum Asia Investments on September 1, 2024 and sell it today you would lose (7.00) from holding Platinum Asia Investments or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Platinum Asia Investments
Performance |
| Timeline |
| Stelar Metals |
| Platinum Asia Investments |
Stelar Metals and Platinum Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Platinum Asia
The main advantage of trading using opposite Stelar Metals and Platinum Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Platinum Asia 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 Asia will offset losses from the drop in Platinum Asia's long position.| Stelar Metals vs. Northern Star Resources | Stelar Metals vs. Evolution Mining | Stelar Metals vs. Bluescope Steel | Stelar Metals vs. Sandfire Resources NL |
| Platinum Asia vs. Navigator Global Investments | Platinum Asia vs. Diversified United Investment | Platinum Asia vs. Garda Diversified Ppty | Platinum Asia 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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