Platinum Commodity Profile
| PLUSD Commodity | 944.80 1.50 0.16% |
Performance4 of 100
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Platinum is trading at 944.80 as of the 1st of May 2024, a -0.16 percent decrease since the beginning of the trading day. The commodity's lowest day price was 942.3. The performance ratings for Platinum are calculated daily based on our scoring framework. The performance scores are derived for the period starting the 1st of April 2024 and ending today, the 1st of May 2024. Click here to learn more.
Platinum Risk Profiles
In the context of commodities, the Platinum market risk premium refers to the extra return investors expect from holding Platinum as part of a well-diversified portfolio. This premium is integral to the Capital Asset Pricing Model (CAPM), a framework widely employed by analysts and investors to determine the acceptable rate of return for investing in Platinum. At the heart of the CAPM lies the interplay between risk and reward, often articulated through the metrics of alpha and beta. In the Platinum market, alpha and beta serve as critical indicators for assessing Platinum's performance relative to broader market movements. Nonetheless, conventional measures of volatility also play a pivotal role, providing additional insights into the market's fluctuations and investment risk associated with Platinum.
| Mean Deviation | 1.16 | |||
| Semi Deviation | 1.4 | |||
| Standard Deviation | 1.53 | |||
| Variance | 2.34 |
Platinum Against Markets
Picking the right benchmark for Platinum commodity is fundamental to making educated investment choices. Many naive investors compare their positions with the S&P 500 or with the Nasdaq. But these benchmarks are not all-inclusive and generally should be used only for large-capitalization equities or stock offerings from large companies. When the price of a selected benchmark declines in a down market, there may be an uptick in Platinum commodity price where buyers come in believing the asset is cheap. The opposite is true when the market is bullish; so, accurately picking the benchmark for Platinum is critical whether you are bullish or bearish towards Platinum at a given time. Please also check how Platinum's historical prices are related to one of the top price index indicators.
Platinum Related Commodities
One prevalent trading approach among algorithmic traders in the commodities sector involves employing market-neutral strategies, wherein each trade is designed to hedge away specific risks. Given that this approach necessitates two distinct transactions, if one position underperforms unexpectedly, the other can potentially offset some of the losses. This method can be applied to commodities such as Platinum, pairing it with other commodities or financial instruments to create a balanced, market-neutral setup.
| Risk & Return | Correlation |
How to buy Platinum Commodity?
Before investing in Platinum, you must ensure you fully understand your financial goals and how diversified (or not) your overall investments are now. Then, after you clearly understand your investment objectives, consider investing in Platinum. To buy Platinum commodity, you can follow these steps:- Choose a brokerage firm or find a reputable dealer: You need to select a brokerage firm to buy Platinum. Storage, insurance, and liquidity are significant factors. Physical commodities can be less liquid and more cumbersome to sell compared to financial assets.
- Open an account: Once you have chosen a brokerage firm, you will need to open an account. You will be required to provide personal information, such as your name, address, and Social Security number.
- Fund your account: You will need to deposit funds into your brokerage account to purchase Platinum commodity. You can do this by transferring funds from your bank account or other investment accounts.
- Place your order: Once you have located Platinum commodity in your brokerage account, you can place your order to buy it. You will need to specify the number of shares you want to buy and the price you are willing to pay.
- Monitor your investment: After you have purchased Platinum commodity, you should monitor your investment to track its performance and make informed decisions about buying, selling, or holding the commodity
It's important to note that investing in commodities, such as Platinum, carries risks, and you should carefully consider your investment goals and risk tolerance before making any investment decisions. Also, remember various factors, including economic indicators, political events, and investor sentiment, can influence commodity markets. These factors can cause fluctuations in commodity prices and lead to market volatility affecting your buy or sell decision. However, volatility can also present opportunities for investors to make gains by buying commodities when prices are low and selling when they are high. It's important for investors to have a long-term perspective and a well-diversified portfolio to manage the impact of market volatility on their investments.
Already Invested in Platinum?
The danger of trading Platinum is mainly related to its market volatility and Commodity specific events. As an investor, you must understand the concept of risk-adjusted return before you start trading. The most common way to measure the risk of Platinum is by using the Sharpe ratio. The ratio expresses how much excess return you acquire for the extra volatility you endure for holding a more risker asset than Platinum. The Sharpe ratio is calculated by using standard deviation and excess return to determine reward per unit of risk. To understand how volatile Platinum is, you must compare it to a benchmark. Traditionally, the risk-free rate of return is the rate of return on the shortest-dated U.S. Treasury, such as a 3-year bond.
Check out Your Equity Center to better understand how to build diversified portfolios. Also, note that the market value of any commodity could be tightly coupled with the direction of predictive economic indicators such as signals in state. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.