Correlation Between Platinum Investment and MOVIE GAMES

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

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

Diversification Opportunities for Platinum Investment and MOVIE GAMES

0.68

Correlation Coefficient

Platinum Investment  MOVIE GAMES

Poor diversification

The 3 months correlation between Platinum and MOVIE is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Investment Management and MOVIE GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOVIE GAMES SA and Platinum Investment 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 Investment Management are associated (or correlated) with MOVIE GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOVIE GAMES SA has no effect on the direction of Platinum Investment i.e., Platinum Investment and MOVIE GAMES go up and down completely randomly.

Pair Corralation between Platinum Investment and MOVIE GAMES

Assuming the 90 days horizon Platinum Investment is expected to generate 30.03 times less return on investment than MOVIE GAMES. But when comparing it to its historical volatility, Platinum Investment Management is 2.16 times less risky than MOVIE GAMES. It trades about 0.01 of its potential returns per unit of risk. MOVIE GAMES SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  356.00  in MOVIE GAMES SA on October 25, 2024 and sell it today you would earn a total of  41.00  from holding MOVIE GAMES SA or generate 11.52% return on investment over 90 days.

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

Platinum Investment Management  vs.  MOVIE GAMES SA

Platinum Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Platinum Investment Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

MOVIE GAMES SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MOVIE GAMES SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MOVIE GAMES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Platinum Investment and MOVIE GAMES

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

The idea behind Platinum Investment Management and MOVIE GAMES SA 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.