Correlation Between Platinum Group and Braveheart Resources

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

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

Diversification Opportunities for Platinum Group and Braveheart Resources

0.06

Correlation Coefficient

Platinum Group  Braveheart Resources

Significant diversification

The 3 months correlation between Platinum and Braveheart is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Group Metals and Braveheart Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braveheart Resources and Platinum Group 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 Group Metals are associated (or correlated) with Braveheart Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braveheart Resources has no effect on the direction of Platinum Group i.e., Platinum Group and Braveheart Resources go up and down completely randomly.

Pair Corralation between Platinum Group and Braveheart Resources

Considering the 90-day investment horizon Platinum Group Metals is expected to under-perform the Braveheart Resources. But the stock apears to be less risky and, when comparing its historical volatility, Platinum Group Metals is 1.54 times less risky than Braveheart Resources. The stock trades about -0.06 of its potential returns per unit of risk. The Braveheart Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2.93  in Braveheart Resources on November 20, 2024 and sell it today you would earn a total of  0.07  from holding Braveheart Resources or generate 2.39% return on investment over 90 days.

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

Platinum Group Metals  vs.  Braveheart Resources

Platinum Group Metals

Risk-Adjusted Performance

Very Weak

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

Braveheart Resources

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Braveheart Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Braveheart Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Platinum Group and Braveheart Resources

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

The idea behind Platinum Group Metals and Braveheart Resources 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.