Correlation Between Tombador Iron and Platinum Asia
Can any of the company-specific risk be diversified away by investing in both Tombador Iron 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 Tombador Iron and Platinum Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tombador Iron and Platinum Asia Investments, you can compare the effects of market volatilities on Tombador Iron 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 Tombador Iron with a short position of Platinum Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tombador Iron and Platinum Asia.
Diversification Opportunities for Tombador Iron and Platinum Asia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tombador and Platinum is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tombador Iron 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 Tombador Iron 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 Tombador Iron 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 Tombador Iron i.e., Tombador Iron and Platinum Asia go up and down completely randomly.
Pair Corralation between Tombador Iron and Platinum Asia
Assuming the 90 days trading horizon Tombador Iron is expected to generate 35.92 times more return on investment than Platinum Asia. However, Tombador Iron is 35.92 times more volatile than Platinum Asia Investments. It trades about 0.04 of its potential returns per unit of risk. Platinum Asia Investments is currently generating about 0.04 per unit of risk. If you would invest 2.40 in Tombador Iron on August 25, 2024 and sell it today you would earn a total of 32.60 from holding Tombador Iron or generate 1358.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Tombador Iron vs. Platinum Asia Investments
Performance |
| Timeline |
| Tombador Iron |
| Platinum Asia Investments |
Tombador Iron and Platinum Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tombador Iron and Platinum Asia
The main advantage of trading using opposite Tombador Iron and Platinum Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tombador Iron 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.| Tombador Iron vs. Northern Star Resources | Tombador Iron vs. Evolution Mining | Tombador Iron vs. Bluescope Steel | Tombador Iron vs. Sandfire Resources NL |
| Platinum Asia vs. Garda Diversified Ppty | Platinum Asia vs. Computershare | Platinum Asia vs. MFF Capital Investments | Platinum Asia vs. Alto Metals |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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