Correlation Between Southern Cross and Platinum Asset
Can any of the company-specific risk be diversified away by investing in both Southern Cross 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 Southern Cross and Platinum Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Cross Media and Platinum Asset Management, you can compare the effects of market volatilities on Southern Cross 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 Southern Cross with a short position of Platinum Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Cross and Platinum Asset.
Diversification Opportunities for Southern Cross and Platinum Asset
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Southern and Platinum is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Southern Cross Media 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 Southern Cross 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 Southern Cross Media 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 Southern Cross i.e., Southern Cross and Platinum Asset go up and down completely randomly.
Pair Corralation between Southern Cross and Platinum Asset
Assuming the 90 days trading horizon Southern Cross Media is expected to generate 0.85 times more return on investment than Platinum Asset. However, Southern Cross Media is 1.18 times less risky than Platinum Asset. It trades about 0.1 of its potential returns per unit of risk. Platinum Asset Management is currently generating about -0.1 per unit of risk. If you would invest 56.00 in Southern Cross Media on November 2, 2024 and sell it today you would earn a total of 6.00 from holding Southern Cross Media or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Cross Media vs. Platinum Asset Management
Performance |
| Timeline |
| Southern Cross Media |
| Platinum Asset Management |
Southern Cross and Platinum Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Cross and Platinum Asset
The main advantage of trading using opposite Southern Cross and Platinum Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Cross 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.| Southern Cross vs. Carawine Resources Limited | Southern Cross vs. Platinum Asset Management | Southern Cross vs. Nufarm Finance NZ | Southern Cross vs. Hotel Property Investments |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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