Correlation Between TeraGo and Platinum Group
Can any of the company-specific risk be diversified away by investing in both TeraGo and Platinum Group 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 TeraGo and Platinum Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TeraGo Inc and Platinum Group Metals, you can compare the effects of market volatilities on TeraGo and Platinum Group 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 TeraGo with a short position of Platinum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of TeraGo and Platinum Group.
Diversification Opportunities for TeraGo and Platinum Group
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TeraGo and Platinum is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding TeraGo Inc and Platinum Group Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Group Metals and TeraGo 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 TeraGo Inc are associated (or correlated) with Platinum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Group Metals has no effect on the direction of TeraGo i.e., TeraGo and Platinum Group go up and down completely randomly.
Pair Corralation between TeraGo and Platinum Group
Assuming the 90 days trading horizon TeraGo Inc is expected to under-perform the Platinum Group. But the stock apears to be less risky and, when comparing its historical volatility, TeraGo Inc is 1.35 times less risky than Platinum Group. The stock trades about -0.56 of its potential returns per unit of risk. The Platinum Group Metals is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest 282.00 in Platinum Group Metals on August 29, 2024 and sell it today you would lose (57.00) from holding Platinum Group Metals or give up 20.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TeraGo Inc vs. Platinum Group Metals
Performance |
| Timeline |
| TeraGo Inc |
| Platinum Group Metals |
TeraGo and Platinum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TeraGo and Platinum Group
The main advantage of trading using opposite TeraGo and Platinum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TeraGo position performs unexpectedly, Platinum Group 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 Group will offset losses from the drop in Platinum Group's long position.| TeraGo vs. Alphabet Inc CDR | TeraGo vs. Microsoft Corp CDR | TeraGo vs. NVIDIA CDR | TeraGo vs. Tesla Inc CDR |
| Platinum Group vs. Eastern Platinum Limited | Platinum Group vs. Entree Resources | Platinum Group vs. Solitario Exploration Royalty | Platinum Group vs. Minco Silver |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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