Correlation Between Platinum Asia and Origin Energy
Can any of the company-specific risk be diversified away by investing in both Platinum Asia and Origin Energy 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 Platinum Asia and Origin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Asia Investments and Origin Energy, you can compare the effects of market volatilities on Platinum Asia and Origin Energy 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 Platinum Asia with a short position of Origin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and Origin Energy.
Diversification Opportunities for Platinum Asia and Origin Energy
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Platinum and Origin is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and Origin Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Energy and Platinum Asia 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 Platinum Asia Investments are associated (or correlated) with Origin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Energy has no effect on the direction of Platinum Asia i.e., Platinum Asia and Origin Energy go up and down completely randomly.
Pair Corralation between Platinum Asia and Origin Energy
Assuming the 90 days trading horizon Platinum Asia Investments is expected to generate 0.96 times more return on investment than Origin Energy. However, Platinum Asia Investments is 1.04 times less risky than Origin Energy. It trades about 0.22 of its potential returns per unit of risk. Origin Energy is currently generating about -0.1 per unit of risk. If you would invest 97.00 in Platinum Asia Investments on September 24, 2024 and sell it today you would earn a total of 4.00 from holding Platinum Asia Investments or generate 4.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Platinum Asia Investments vs. Origin Energy
Performance |
Timeline |
Platinum Asia Investments |
Origin Energy |
Platinum Asia and Origin Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Platinum Asia and Origin Energy
The main advantage of trading using opposite Platinum Asia and Origin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia position performs unexpectedly, Origin Energy 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 Origin Energy will offset losses from the drop in Origin Energy's long position.Platinum Asia vs. Aneka Tambang Tbk | Platinum Asia vs. Macquarie Group | Platinum Asia vs. Macquarie Group Ltd | Platinum Asia vs. Challenger |
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Check out your portfolio center.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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