Correlation Between Infinico Metals and Platinum Group

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

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

Diversification Opportunities for Infinico Metals and Platinum Group

-0.38

Correlation Coefficient

Infinico Metals  Platinum Group

Very good diversification

The 3 months correlation between Infinico and Platinum is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and Platinum Group Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Group Metals and Infinico Metals 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 Infinico Metals Corp are associated (or correlated) with Platinum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Group Metals has no effect on the direction of Infinico Metals i.e., Infinico Metals and Platinum Group go up and down completely randomly.

Pair Corralation between Infinico Metals and Platinum Group

Assuming the 90 days trading horizon Infinico Metals Corp is expected to under-perform the Platinum Group. In addition to that, Infinico Metals is 1.42 times more volatile than Platinum Group Metals. It trades about -0.01 of its total potential returns per unit of risk. Platinum Group Metals is currently generating about 0.15 per unit of volatility. If you would invest  162.00  in Platinum Group Metals on September 3, 2024 and sell it today you would earn a total of  77.00  from holding Platinum Group Metals or generate 47.53% return on investment over 90 days.

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

Infinico Metals Corp  vs.  Platinum Group Metals

Infinico Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infinico Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Infinico Metals is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Platinum Group Metals

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Platinum Group Metals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Platinum Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infinico Metals and Platinum Group

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

The idea behind Infinico Metals Corp and Platinum Group Metals 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.