Correlation Between SUNCORP PREF and Platinum Asia

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

By analyzing existing cross correlation between SUNCORP PREF CPS3 and Platinum Asia, you can compare the effects of market volatilities on SUNCORP PREF and Platinum Asia 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 SUNCORP PREF with a short position of Platinum Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUNCORP PREF and Platinum Asia.

Diversification Opportunities for SUNCORP PREF and Platinum Asia

0.0

Correlation Coefficient

SUNCORP PREF  Platinum Asia

Pay attention - limited upside

The 3 months correlation between SUNCORP and Platinum is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SUNCORP PREF CPS3 and Platinum Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asia and SUNCORP PREF 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 SUNCORP PREF CPS3 are associated (or correlated) with Platinum Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asia has no effect on the direction of SUNCORP PREF i.e., SUNCORP PREF and Platinum Asia go up and down completely randomly.

Pair Corralation between SUNCORP PREF and Platinum Asia

If you would invest  485.00  in Platinum Asia on December 22, 2024 and sell it today you would earn a total of  25.00  from holding Platinum Asia or generate 5.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SUNCORP PREF CPS3  vs.  Platinum Asia

SUNCORP PREF CPS3

Risk-Adjusted Performance

Very Weak

Over the last 90 days SUNCORP PREF CPS3 has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, SUNCORP PREF is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Platinum Asia

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Platinum Asia are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively stable basic indicators, Platinum Asia is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SUNCORP PREF and Platinum Asia

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

The idea behind SUNCORP PREF CPS3 and Platinum Asia 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.