Correlation Between Impala Platinum and Arian Silver

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

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

Diversification Opportunities for Impala Platinum and Arian Silver

0.05
  Correlation Coefficient
Impala Platinum Holdings
Arian Silver Copr

Significant diversification

The 3 months correlation between Impala and Arian is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Impala Platinum Holdings and Arian Silver Copr in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Arian Silver Copr and Impala Platinum 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 Impala Platinum Holdings are associated (or correlated) with Arian Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arian Silver Copr has no effect on the direction of Impala Platinum i.e., Impala Platinum and Arian Silver go up and down completely randomly.

Pair Corralation between Impala Platinum and Arian Silver

Assuming the 90 days horizon Impala Platinum Holdings is expected to generate 0.44 times more return on investment than Arian Silver. However, Impala Platinum Holdings is 2.25 times less risky than Arian Silver. It trades about 0.0 of its potential returns per unit of risk. Arian Silver Copr is currently generating about -0.16 per unit of risk. If you would invest  1,331  in Impala Platinum Holdings on September 7, 2021 and sell it today you would lose (44.00)  from holding Impala Platinum Holdings or give up 3.31% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Impala Platinum Holdings  vs.  Arian Silver Copr

 Performance (%) 
      Timeline 
Impala Platinum Holdings 
Impala Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Impala Platinum Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Impala Platinum exhibited solid returns over the last few months and may actually be approaching a breakup point.

Impala Price Channel

Arian Silver Copr 
Arian Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Arian Silver Copr are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Arian Silver exhibited solid returns over the last few months and may actually be approaching a breakup point.

Arian Price Channel

Impala Platinum and Arian Silver Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Impala Platinum and Arian Silver

The main advantage of trading using opposite Impala Platinum and Arian Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impala Platinum position performs unexpectedly, Arian Silver 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 Arian Silver will offset losses from the drop in Arian Silver's long position.
The idea behind Impala Platinum Holdings and Arian Silver Copr 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 Equity Search module to search for activelly traded equities including funds and ETFs from over 30 global markets.

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