Correlation Between Platinum Investment and SPORTING

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

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

Diversification Opportunities for Platinum Investment and SPORTING

0.22

Correlation Coefficient

Platinum Investment  SPORTING

Modest diversification

The 3 months correlation between Platinum and SPORTING is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Investment Management and SPORTING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPORTING and Platinum Investment 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 Investment Management are associated (or correlated) with SPORTING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPORTING has no effect on the direction of Platinum Investment i.e., Platinum Investment and SPORTING go up and down completely randomly.

Pair Corralation between Platinum Investment and SPORTING

Assuming the 90 days horizon Platinum Investment Management is expected to generate 1.26 times more return on investment than SPORTING. However, Platinum Investment is 1.26 times more volatile than SPORTING. It trades about 0.06 of its potential returns per unit of risk. SPORTING is currently generating about -0.01 per unit of risk. If you would invest  30.00  in Platinum Investment Management on April 24, 2025 and sell it today you would earn a total of  4.00  from holding Platinum Investment Management or generate 13.33% return on investment over 90 days.

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

Platinum Investment Management  vs.  SPORTING

Platinum Investment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Platinum Investment Management are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Platinum Investment reported solid returns over the last few months and may actually be approaching a breakup point.

SPORTING

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPORTING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, SPORTING is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Platinum Investment and SPORTING

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

The idea behind Platinum Investment Management and SPORTING 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.