Correlation Between Platinum Asia and FSA

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

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

Diversification Opportunities for Platinum Asia and FSA

0.06

Correlation Coefficient

Platinum Asia  FSA

Significant diversification

The 3 months correlation between Platinum and FSA is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and FSA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSA Group and Platinum Asia 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 Asia Investments are associated (or correlated) with FSA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSA Group has no effect on the direction of Platinum Asia i.e., Platinum Asia and FSA go up and down completely randomly.

Pair Corralation between Platinum Asia and FSA

Assuming the 90 days trading horizon Platinum Asia Investments is expected to generate 0.9 times more return on investment than FSA. However, Platinum Asia Investments is 1.11 times less risky than FSA. It trades about 0.05 of its potential returns per unit of risk. FSA Group is currently generating about -0.01 per unit of risk. If you would invest  82.00  in Platinum Asia Investments on September 10, 2024 and sell it today you would earn a total of  16.00  from holding Platinum Asia Investments or generate 19.51% return on investment over 90 days.

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

Platinum Asia Investments  vs.  FSA Group

Platinum Asia Investments

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Platinum Asia Investments are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Platinum Asia may actually be approaching a critical reversion point that can send shares even higher in January 2025.

FSA Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FSA Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Platinum Asia and FSA

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

The idea behind Platinum Asia Investments and FSA 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.