Correlation Between NAT BANK and Platinum Asia

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

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

Diversification Opportunities for NAT BANK and Platinum Asia

0.0

Correlation Coefficient

NAT BANK  Platinum Asia

Pay attention - limited upside

The 3 months correlation between NAT and Platinum is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NAT BANK CPS and Platinum Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asia and NAT BANK 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 NAT BANK CPS are associated (or correlated) with Platinum Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asia has no effect on the direction of NAT BANK i.e., NAT BANK and Platinum Asia go up and down completely randomly.

Pair Corralation between NAT BANK and Platinum Asia

If you would invest  485.00  in Platinum Asia on December 21, 2024 and sell it today you would earn a total of  27.00  from holding Platinum Asia or generate 5.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NAT BANK CPS  vs.  Platinum Asia

NAT BANK CPS

Risk-Adjusted Performance

Very Weak

Over the last 90 days NAT BANK CPS has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, NAT BANK is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Platinum Asia

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Platinum Asia are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively stable basic indicators, Platinum Asia is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with NAT BANK and Platinum Asia

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

The idea behind NAT BANK CPS and Platinum Asia 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.