Correlation Between Platinum Asset and Black Cat

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

By analyzing existing cross correlation between Platinum Asset Management and Black Cat Syndicate, you can compare the effects of market volatilities on Platinum Asset and Black Cat 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 Asset with a short position of Black Cat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asset and Black Cat.

Diversification Opportunities for Platinum Asset and Black Cat

-0.45

Correlation Coefficient

Platinum Asset  Black Cat

Very good diversification

The 3 months correlation between Platinum and Black is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management and Black Cat Syndicate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Cat Syndicate and Platinum Asset 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 Asset Management are associated (or correlated) with Black Cat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Cat Syndicate has no effect on the direction of Platinum Asset i.e., Platinum Asset and Black Cat go up and down completely randomly.

Pair Corralation between Platinum Asset and Black Cat

Assuming the 90 days trading horizon Platinum Asset Management is expected to under-perform the Black Cat. But the stock apears to be less risky and, when comparing its historical volatility, Platinum Asset Management is 1.38 times less risky than Black Cat. The stock trades about -0.13 of its potential returns per unit of risk. The Black Cat Syndicate is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  45.00  in Black Cat Syndicate on September 26, 2024 and sell it today you would earn a total of  13.00  from holding Black Cat Syndicate or generate 28.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Platinum Asset Management  vs.  Black Cat Syndicate

Platinum Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Platinum Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Black Cat Syndicate

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Black Cat Syndicate are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Black Cat unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Platinum Asset and Black Cat

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

The idea behind Platinum Asset Management and Black Cat Syndicate 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.