Correlation Between Corn Futures and Platinum
Can any of the company-specific risk be diversified away by investing in both Corn Futures and 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 Corn Futures and Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corn Futures and Platinum, you can compare the effects of market volatilities on Corn Futures and 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 Corn Futures with a short position of Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corn Futures and Platinum.
Diversification Opportunities for Corn Futures and Platinum
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Corn and Platinum is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Corn Futures and Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum and Corn Futures 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 Corn Futures are associated (or correlated) with Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum has no effect on the direction of Corn Futures i.e., Corn Futures and Platinum go up and down completely randomly.
Pair Corralation between Corn Futures and Platinum
Assuming the 90 days horizon Corn Futures is expected to under-perform the Platinum. In addition to that, Corn Futures is 1.07 times more volatile than Platinum. It trades about -0.03 of its total potential returns per unit of risk. Platinum is currently generating about 0.02 per unit of volatility. If you would invest 94,860 in Platinum on November 9, 2024 and sell it today you would earn a total of 7,410 from holding Platinum or generate 7.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.23% |
| Values | Daily Returns |
Corn Futures vs. Platinum
Performance |
| Timeline |
| Corn Futures |
| Platinum |
Corn Futures and Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corn Futures and Platinum
The main advantage of trading using opposite Corn Futures and Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corn Futures position performs unexpectedly, 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 Platinum will offset losses from the drop in Platinum's long position.| Corn Futures vs. Five Year Treasury Note | Corn Futures vs. Micro Gold Futures | Corn Futures vs. Palladium | Corn Futures vs. Brent Crude Oil |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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