Correlation Between Eastern Platinum and Minco Silver

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

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

Diversification Opportunities for Eastern Platinum and Minco Silver

0.09

Correlation Coefficient

Eastern Platinum  Minco Silver

Significant diversification

The 3 months correlation between Eastern and Minco is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Platinum Limited and Minco Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minco Silver and Eastern Platinum 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 Eastern Platinum Limited are associated (or correlated) with Minco Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minco Silver has no effect on the direction of Eastern Platinum i.e., Eastern Platinum and Minco Silver go up and down completely randomly.

Pair Corralation between Eastern Platinum and Minco Silver

Assuming the 90 days trading horizon Eastern Platinum Limited is expected to under-perform the Minco Silver. In addition to that, Eastern Platinum is 1.17 times more volatile than Minco Silver. It trades about -0.01 of its total potential returns per unit of risk. Minco Silver is currently generating about 0.03 per unit of volatility. If you would invest  19.00  in Minco Silver on December 1, 2024 and sell it today you would earn a total of  0.00  from holding Minco Silver or generate 0.0% return on investment over 90 days.

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

Eastern Platinum Limited  vs.  Minco Silver

Eastern Platinum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eastern Platinum Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Eastern Platinum is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Minco Silver

Risk-Adjusted Performance

Weak

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

Pair Trading with Eastern Platinum and Minco Silver

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

The idea behind Eastern Platinum Limited and Minco Silver 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.