Correlation Between Star Royalties and Impala Platinum
Can any of the company-specific risk be diversified away by investing in both Star Royalties and Impala 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 Star Royalties and Impala Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Royalties and Impala Platinum Holdings, you can compare the effects of market volatilities on Star Royalties and Impala 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 Star Royalties with a short position of Impala Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Royalties and Impala Platinum.
Diversification Opportunities for Star Royalties and Impala Platinum
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Star and Impala is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Star Royalties and Impala Platinum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impala Platinum Holdings and Star Royalties 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 Star Royalties are associated (or correlated) with Impala Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impala Platinum Holdings has no effect on the direction of Star Royalties i.e., Star Royalties and Impala Platinum go up and down completely randomly.
Pair Corralation between Star Royalties and Impala Platinum
Assuming the 90 days horizon Star Royalties is expected to generate 1.07 times more return on investment than Impala Platinum. However, Star Royalties is 1.07 times more volatile than Impala Platinum Holdings. It trades about -0.06 of its potential returns per unit of risk. Impala Platinum Holdings is currently generating about -0.13 per unit of risk. If you would invest 23.00 in Star Royalties on September 3, 2024 and sell it today you would lose (1.00) from holding Star Royalties or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Royalties vs. Impala Platinum Holdings
Performance |
| Timeline |
| Star Royalties |
| Impala Platinum Holdings |
Star Royalties and Impala Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Royalties and Impala Platinum
The main advantage of trading using opposite Star Royalties and Impala Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Royalties position performs unexpectedly, Impala 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 Impala Platinum will offset losses from the drop in Impala Platinum's long position.| Star Royalties vs. Defiance Silver Corp | Star Royalties vs. Diamond Fields Resources | Star Royalties vs. GoGold Resources | Star Royalties vs. EnviroGold Global Limited |
| Impala Platinum vs. Star Royalties | Impala Platinum vs. Defiance Silver Corp | Impala Platinum vs. Diamond Fields Resources | Impala Platinum vs. GoGold Resources |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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