Correlation Between BANK QLD and Platinum Asia

Can any of the company-specific risk be diversified away by investing in both BANK QLD 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 BANK QLD and Platinum Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BANK QLD PREF and Platinum Asia, you can compare the effects of market volatilities on BANK QLD 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 BANK QLD with a short position of Platinum Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK QLD and Platinum Asia.

Diversification Opportunities for BANK QLD and Platinum Asia

0.0

Correlation Coefficient

BANK QLD  Platinum Asia

Pay attention - limited upside

The 3 months correlation between BANK and Platinum is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BANK QLD PREF and Platinum Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asia and BANK QLD 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 BANK QLD PREF 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 has no effect on the direction of BANK QLD i.e., BANK QLD and Platinum Asia go up and down completely randomly.

Pair Corralation between BANK QLD and Platinum Asia

If you would invest  487.00  in Platinum Asia on October 25, 2024 and sell it today you would earn a total of  5.00  from holding Platinum Asia or generate 1.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BANK QLD PREF  vs.  Platinum Asia

BANK QLD PREF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK QLD PREF has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, BANK QLD is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Platinum Asia

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Platinum Asia are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively stable basic indicators, Platinum Asia is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BANK QLD and Platinum Asia

The main advantage of trading using opposite BANK QLD and Platinum Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK QLD 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.

The idea behind BANK QLD PREF and Platinum Asia pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.