Correlation Between Platinum Investment and Coor Service

Can any of the company-specific risk be diversified away by investing in both Platinum Investment and Coor Service 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 Coor Service 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 Coor Service Management, you can compare the effects of market volatilities on Platinum Investment and Coor Service 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 Coor Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Investment and Coor Service.

Diversification Opportunities for Platinum Investment and Coor Service

0.64

Correlation Coefficient

Platinum Investment  Coor Service

Poor diversification

The 3 months correlation between Platinum and Coor is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Investment Management and Coor Service Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coor Service Management 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 Coor Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coor Service Management has no effect on the direction of Platinum Investment i.e., Platinum Investment and Coor Service go up and down completely randomly.

Pair Corralation between Platinum Investment and Coor Service

Assuming the 90 days horizon Platinum Investment Management is expected to under-perform the Coor Service. In addition to that, Platinum Investment is 5.21 times more volatile than Coor Service Management. It trades about -0.02 of its total potential returns per unit of risk. Coor Service Management is currently generating about 0.07 per unit of volatility. If you would invest  281.00  in Coor Service Management on September 24, 2024 and sell it today you would earn a total of  4.00  from holding Coor Service Management or generate 1.42% 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.  Coor Service Management

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 nearly stable basic indicators, Platinum Investment is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Coor Service Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coor Service Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Platinum Investment and Coor Service

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

The idea behind Platinum Investment Management and Coor Service 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.