Correlation Between Brightrock Gold and Platinum Group

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

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

Diversification Opportunities for Brightrock Gold and Platinum Group

-0.38

Correlation Coefficient

Brightrock Gold  Platinum Group

Very good diversification

The 3 months correlation between Brightrock and Platinum is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Brightrock Gold Corp and Platinum Group Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Group Metals and Brightrock Gold 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 Brightrock Gold Corp are associated (or correlated) with Platinum Group. 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 Metals has no effect on the direction of Brightrock Gold i.e., Brightrock Gold and Platinum Group go up and down completely randomly.

Pair Corralation between Brightrock Gold and Platinum Group

Given the investment horizon of 90 days Brightrock Gold Corp is expected to under-perform the Platinum Group. In addition to that, Brightrock Gold is 1.56 times more volatile than Platinum Group Metals. It trades about -0.08 of its total potential returns per unit of risk. Platinum Group Metals is currently generating about 0.05 per unit of volatility. If you would invest  133.00  in Platinum Group Metals on September 14, 2024 and sell it today you would earn a total of  10.00  from holding Platinum Group Metals or generate 7.52% return on investment over 90 days.

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

Brightrock Gold Corp  vs.  Platinum Group Metals

Brightrock Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brightrock Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Platinum Group Metals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Platinum Group Metals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating essential indicators, Platinum Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brightrock Gold and Platinum Group

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

The idea behind Brightrock Gold Corp and Platinum Group Metals 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.