Correlation Between Clifton Mining and Sylvania Platinum

Can any of the company-specific risk be diversified away by investing in both Clifton Mining and Sylvania 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 Sylvania 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 Sylvania Platinum Limited, you can compare the effects of market volatilities on Clifton Mining and Sylvania 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 Sylvania Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clifton Mining and Sylvania Platinum.

Diversification Opportunities for Clifton Mining and Sylvania Platinum

0.04

Correlation Coefficient

Clifton Mining  Sylvania Platinum

Significant diversification

The 3 months correlation between Clifton and Sylvania is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Clifton Mining Co and Sylvania Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sylvania 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 Sylvania Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sylvania Platinum has no effect on the direction of Clifton Mining i.e., Clifton Mining and Sylvania Platinum go up and down completely randomly.

Pair Corralation between Clifton Mining and Sylvania Platinum

Given the investment horizon of 90 days Clifton Mining Co is expected to generate 3.09 times more return on investment than Sylvania Platinum. However, Clifton Mining is 3.09 times more volatile than Sylvania Platinum Limited. It trades about 0.05 of its potential returns per unit of risk. Sylvania Platinum Limited is currently generating about -0.09 per unit of risk. If you would invest  5.00  in Clifton Mining Co on September 4, 2024 and sell it today you would earn a total of  0.20  from holding Clifton Mining Co or generate 4.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Clifton Mining Co  vs.  Sylvania Platinum Limited

Clifton Mining

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clifton Mining Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Clifton Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Sylvania Platinum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sylvania Platinum Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Clifton Mining and Sylvania Platinum

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

The idea behind Clifton Mining Co and Sylvania 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.