Correlation Between Impala Platinum and Clicks

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

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

Diversification Opportunities for Impala Platinum and Clicks

0.04

Correlation Coefficient

Impala Platinum  Clicks

Significant diversification

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

Pair Corralation between Impala Platinum and Clicks

Assuming the 90 days trading horizon Impala Platinum Holdings is expected to under-perform the Clicks. In addition to that, Impala Platinum is 2.67 times more volatile than Clicks. It trades about -0.02 of its total potential returns per unit of risk. Clicks is currently generating about 0.06 per unit of volatility. If you would invest  2,636,115  in Clicks on October 12, 2024 and sell it today you would earn a total of  1,146,885  from holding Clicks or generate 43.51% return on investment over 90 days.

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

Impala Platinum Holdings  vs.  Clicks

Impala Platinum Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impala Platinum Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Impala Platinum is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Clicks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clicks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Clicks is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Impala Platinum and Clicks

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

The idea behind Impala Platinum Holdings and Clicks 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.