Correlation Between Sri Panwa and Platinum

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

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

Diversification Opportunities for Sri Panwa and Platinum

0.72

Correlation Coefficient

Sri Panwa  Platinum

Poor diversification

The 3 months correlation between Sri and Platinum is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sri panwa Hospitality and The Platinum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Group and Sri Panwa 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 Sri panwa Hospitality are associated (or correlated) with Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Group has no effect on the direction of Sri Panwa i.e., Sri Panwa and Platinum go up and down completely randomly.

Pair Corralation between Sri Panwa and Platinum

Assuming the 90 days trading horizon Sri panwa Hospitality is expected to generate 0.82 times more return on investment than Platinum. However, Sri panwa Hospitality is 1.22 times less risky than Platinum. It trades about -0.12 of its potential returns per unit of risk. The Platinum Group is currently generating about -0.11 per unit of risk. If you would invest  579.00  in Sri panwa Hospitality on October 25, 2024 and sell it today you would lose (79.00) from holding Sri panwa Hospitality or give up 13.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Sri panwa Hospitality  vs.  The Platinum Group

Sri panwa Hospitality

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sri panwa Hospitality has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Platinum Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Platinum Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Sri Panwa and Platinum

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

The idea behind Sri panwa Hospitality and The Platinum 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.