Correlation Between Platinum Asset and Yancoal Australia

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

Diversification Opportunities for Platinum Asset and Yancoal Australia

0.03

Correlation Coefficient

Platinum Asset  Yancoal Australia

Significant diversification

The 3 months correlation between Platinum and Yancoal is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management and Yancoal Australia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yancoal Australia 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 Yancoal Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yancoal Australia has no effect on the direction of Platinum Asset i.e., Platinum Asset and Yancoal Australia go up and down completely randomly.

Pair Corralation between Platinum Asset and Yancoal Australia

Assuming the 90 days trading horizon Platinum Asset is expected to generate 2.56 times less return on investment than Yancoal Australia. In addition to that, Platinum Asset is 1.45 times more volatile than Yancoal Australia. It trades about 0.01 of its total potential returns per unit of risk. Yancoal Australia is currently generating about 0.04 per unit of volatility. If you would invest  541.00  in Yancoal Australia on October 7, 2024 and sell it today you would earn a total of  89.00  from holding Yancoal Australia or generate 16.45% return on investment over 90 days.

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

Platinum Asset Management  vs.  Yancoal Australia

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 uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Yancoal Australia

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind Platinum Asset Management and Yancoal Australia 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..