Correlation Between Platinum Asset and Ridley

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

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

Diversification Opportunities for Platinum Asset and Ridley

0.62

Correlation Coefficient

Platinum Asset  Ridley

Poor diversification

The 3 months correlation between Platinum and Ridley is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management and Ridley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ridley and Platinum Asset 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 Asset Management are associated (or correlated) with Ridley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ridley has no effect on the direction of Platinum Asset i.e., Platinum Asset and Ridley go up and down completely randomly.

Pair Corralation between Platinum Asset and Ridley

Assuming the 90 days trading horizon Platinum Asset Management is expected to under-perform the Ridley. In addition to that, Platinum Asset is 2.0 times more volatile than Ridley. It trades about -0.06 of its total potential returns per unit of risk. Ridley is currently generating about -0.02 per unit of volatility. If you would invest  268.00  in Ridley on December 30, 2024 and sell it today you would lose (7.00) from holding Ridley or give up 2.61% of portfolio value over 90 days.

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

Platinum Asset Management  vs.  Ridley

Platinum Asset Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Platinum Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ridley

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ridley has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Ridley is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Platinum Asset and Ridley

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

The idea behind Platinum Asset Management and Ridley 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 Stocks Directory module to find actively traded stocks across global markets.