Correlation Between CHINA SOUTHN and Platinum Group
Can any of the company-specific risk be diversified away by investing in both CHINA SOUTHN 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 CHINA SOUTHN and Platinum Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA SOUTHN AIR H and Platinum Group Metals, you can compare the effects of market volatilities on CHINA SOUTHN 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 CHINA SOUTHN with a short position of Platinum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA SOUTHN and Platinum Group.
Diversification Opportunities for CHINA SOUTHN and Platinum Group
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and Platinum is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding CHINA SOUTHN AIR H 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 CHINA SOUTHN 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 CHINA SOUTHN AIR H 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 CHINA SOUTHN i.e., CHINA SOUTHN and Platinum Group go up and down completely randomly.
Pair Corralation between CHINA SOUTHN and Platinum Group
Assuming the 90 days trading horizon CHINA SOUTHN AIR H is expected to under-perform the Platinum Group. But the stock apears to be less risky and, when comparing its historical volatility, CHINA SOUTHN AIR H is 1.91 times less risky than Platinum Group. The stock trades about -0.11 of its potential returns per unit of risk. The Platinum Group Metals is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 110.00 in Platinum Group Metals on October 24, 2024 and sell it today you would earn a total of 16.00 from holding Platinum Group Metals or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA SOUTHN AIR H vs. Platinum Group Metals
Performance |
| Timeline |
| CHINA SOUTHN AIR |
| Platinum Group Metals |
CHINA SOUTHN and Platinum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA SOUTHN and Platinum Group
The main advantage of trading using opposite CHINA SOUTHN and Platinum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA SOUTHN 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.| CHINA SOUTHN vs. Apple Inc | CHINA SOUTHN vs. Apple Inc | CHINA SOUTHN vs. Apple Inc | CHINA SOUTHN vs. Apple Inc |
| Platinum Group vs. Chiba Bank | Platinum Group vs. RCS MediaGroup SpA | Platinum Group vs. Discover Financial Services | Platinum Group vs. PARKEN Sport Entertainment |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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