Correlation Between Platinum Asset and Transurban

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

Diversification Opportunities for Platinum Asset and Transurban

-0.17

Correlation Coefficient

Platinum Asset  Transurban

Good diversification

The 3 months correlation between Platinum and Transurban is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management and Transurban Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transurban Group 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 Transurban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transurban Group has no effect on the direction of Platinum Asset i.e., Platinum Asset and Transurban go up and down completely randomly.

Pair Corralation between Platinum Asset and Transurban

Assuming the 90 days trading horizon Platinum Asset Management is expected to under-perform the Transurban. In addition to that, Platinum Asset is 3.01 times more volatile than Transurban Group. It trades about -0.06 of its total potential returns per unit of risk. Transurban Group is currently generating about -0.1 per unit of volatility. If you would invest  1,390  in Transurban Group on September 13, 2024 and sell it today you would lose (90.00) from holding Transurban Group or give up 6.47% of portfolio value over 90 days.

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

Platinum Asset Management  vs.  Transurban Group

Platinum Asset Management

Risk-Adjusted Performance

0 of 100

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 latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Transurban Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Transurban Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Transurban 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 Transurban

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

The idea behind Platinum Asset Management and Transurban Group 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.