Correlation Between Platinum Asia and Flagship Investments

Can any of the company-specific risk be diversified away by investing in both Platinum Asia and Flagship Investments 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 Flagship Investments 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 Flagship Investments, you can compare the effects of market volatilities on Platinum Asia and Flagship Investments 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 Flagship Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and Flagship Investments.

Diversification Opportunities for Platinum Asia and Flagship Investments

0.72

Correlation Coefficient

Platinum Asia  Flagship Investments

Poor diversification

The 3 months correlation between Platinum and Flagship is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and Flagship Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flagship Investments 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 Flagship Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flagship Investments has no effect on the direction of Platinum Asia i.e., Platinum Asia and Flagship Investments go up and down completely randomly.

Pair Corralation between Platinum Asia and Flagship Investments

Assuming the 90 days trading horizon Platinum Asia Investments is expected to generate 0.85 times more return on investment than Flagship Investments. However, Platinum Asia Investments is 1.17 times less risky than Flagship Investments. It trades about 0.23 of its potential returns per unit of risk. Flagship Investments is currently generating about 0.14 per unit of risk. If you would invest  100.00  in Platinum Asia Investments on April 25, 2025 and sell it today you would earn a total of  14.00  from holding Platinum Asia Investments or generate 14.0% return on investment over 90 days.

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

Platinum Asia Investments  vs.  Flagship Investments

Platinum Asia Investments

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Platinum Asia Investments are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Platinum Asia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Flagship Investments

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flagship Investments are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Flagship Investments may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Platinum Asia and Flagship Investments

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

The idea behind Platinum Asia Investments and Flagship Investments 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.