Correlation Between Clifton Mining and Eastern Platinum

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

By analyzing existing cross correlation between Clifton Mining Co and Eastern Platinum Limited, you can compare the effects of market volatilities on Clifton Mining and Eastern 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 Clifton Mining with a short position of Eastern Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clifton Mining and Eastern Platinum.

Diversification Opportunities for Clifton Mining and Eastern Platinum

0.08

Correlation Coefficient

Clifton Mining  Eastern Platinum

Significant diversification

The 3 months correlation between Clifton and Eastern is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Clifton Mining Co and Eastern Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Platinum and Clifton Mining 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 Clifton Mining Co are associated (or correlated) with Eastern Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Platinum has no effect on the direction of Clifton Mining i.e., Clifton Mining and Eastern Platinum go up and down completely randomly.

Pair Corralation between Clifton Mining and Eastern Platinum

Given the investment horizon of 90 days Clifton Mining is expected to generate 2.09 times less return on investment than Eastern Platinum. In addition to that, Clifton Mining is 1.53 times more volatile than Eastern Platinum Limited. It trades about 0.03 of its total potential returns per unit of risk. Eastern Platinum Limited is currently generating about 0.09 per unit of volatility. If you would invest  10.00  in Eastern Platinum Limited on December 21, 2024 and sell it today you would earn a total of  2.00  from holding Eastern Platinum Limited or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Clifton Mining Co  vs.  Eastern Platinum Limited

Clifton Mining

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Clifton Mining Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Clifton Mining may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Eastern Platinum

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eastern Platinum Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Eastern Platinum reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clifton Mining and Eastern Platinum

The main advantage of trading using opposite Clifton Mining and Eastern Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clifton Mining position performs unexpectedly, Eastern 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 Eastern Platinum will offset losses from the drop in Eastern Platinum's long position.

The idea behind Clifton Mining Co and Eastern Platinum Limited 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.