Correlation Between Platinum Asia and Retail Food
Can any of the company-specific risk be diversified away by investing in both Platinum Asia and Retail Food 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 Retail Food 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 Retail Food Group, you can compare the effects of market volatilities on Platinum Asia and Retail Food 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 Retail Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and Retail Food.
Diversification Opportunities for Platinum Asia and Retail Food
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Platinum and Retail is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and Retail Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Food Group 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 Retail Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Food Group has no effect on the direction of Platinum Asia i.e., Platinum Asia and Retail Food go up and down completely randomly.
Pair Corralation between Platinum Asia and Retail Food
Assuming the 90 days trading horizon Platinum Asia Investments is expected to generate 0.38 times more return on investment than Retail Food. However, Platinum Asia Investments is 2.63 times less risky than Retail Food. It trades about 0.05 of its potential returns per unit of risk. Retail Food Group is currently generating about 0.0 per unit of risk. If you would invest 78.00 in Platinum Asia Investments on September 24, 2024 and sell it today you would earn a total of 23.00 from holding Platinum Asia Investments or generate 29.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Platinum Asia Investments vs. Retail Food Group
Performance |
Timeline |
Platinum Asia Investments |
Retail Food Group |
Platinum Asia and Retail Food Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Platinum Asia and Retail Food
The main advantage of trading using opposite Platinum Asia and Retail Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia position performs unexpectedly, Retail Food 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 Retail Food will offset losses from the drop in Retail Food'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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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