Correlation Between Impala Platinum and Cellink AB

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

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

Diversification Opportunities for Impala Platinum and Cellink AB

-0.52

Correlation Coefficient

Impala Platinum  Cellink AB

Excellent diversification

The 3 months correlation between Impala and Cellink is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Impala Platinum Holdings and Cellink AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellink AB and Impala Platinum 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 Impala Platinum Holdings are associated (or correlated) with Cellink AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellink AB has no effect on the direction of Impala Platinum i.e., Impala Platinum and Cellink AB go up and down completely randomly.

Pair Corralation between Impala Platinum and Cellink AB

Assuming the 90 days trading horizon Impala Platinum Holdings is expected to generate 0.76 times more return on investment than Cellink AB. However, Impala Platinum Holdings is 1.32 times less risky than Cellink AB. It trades about 0.14 of its potential returns per unit of risk. Cellink AB is currently generating about -0.07 per unit of risk. If you would invest  390.00  in Impala Platinum Holdings on September 12, 2024 and sell it today you would earn a total of  158.00  from holding Impala Platinum Holdings or generate 40.51% return on investment over 90 days.

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

Impala Platinum Holdings  vs.  Cellink AB

Impala Platinum Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Impala Platinum Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Impala Platinum reported solid returns over the last few months and may actually be approaching a breakup point.

Cellink AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cellink AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Impala Platinum and Cellink AB

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

The idea behind Impala Platinum Holdings and Cellink AB 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.