Correlation Between Mystate and Platinum Asset

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

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

Diversification Opportunities for Mystate and Platinum Asset

-0.85

Correlation Coefficient

Mystate  Platinum Asset

Pay attention - limited upside

The 3 months correlation between Mystate and Platinum is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mystate and Platinum Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asset Management and Mystate 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 Mystate are associated (or correlated) with Platinum Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asset Management has no effect on the direction of Mystate i.e., Mystate and Platinum Asset go up and down completely randomly.

Pair Corralation between Mystate and Platinum Asset

Assuming the 90 days trading horizon Mystate is expected to generate 0.31 times more return on investment than Platinum Asset. However, Mystate is 3.22 times less risky than Platinum Asset. It trades about 0.2 of its potential returns per unit of risk. Platinum Asset Management is currently generating about -0.12 per unit of risk. If you would invest  417.00  in Mystate on October 6, 2024 and sell it today you would earn a total of  24.00  from holding Mystate or generate 5.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

Mystate  vs.  Platinum Asset Management

Mystate

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mystate are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mystate unveiled solid returns over the last few months and may actually be approaching a breakup point.

Platinum Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Platinum Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Mystate and Platinum Asset

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

The idea behind Mystate and Platinum Asset Management 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.