Correlation Between Polymetal International and Impala Platinum

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

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

Diversification Opportunities for Polymetal International and Impala Platinum

0.0

Correlation Coefficient

Polymetal International  Impala Platinum

Pay attention - limited upside

The 3 months correlation between Polymetal and Impala is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Polymetal International PLC and Impala Platinum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impala Platinum Holdings and Polymetal International 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 Polymetal International PLC are associated (or correlated) with Impala Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impala Platinum Holdings has no effect on the direction of Polymetal International i.e., Polymetal International and Impala Platinum go up and down completely randomly.

Pair Corralation between Polymetal International and Impala Platinum

Assuming the 90 days horizon Polymetal International PLC is expected to generate 0.22 times more return on investment than Impala Platinum. However, Polymetal International PLC is 4.6 times less risky than Impala Platinum. It trades about 0.06 of its potential returns per unit of risk. Impala Platinum Holdings is currently generating about -0.04 per unit of risk. If you would invest  270.00  in Polymetal International PLC on January 20, 2024 and sell it today you would earn a total of  39.00  from holding Polymetal International PLC or generate 14.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Polymetal International PLC  vs.  Impala Platinum Holdings

Polymetal International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polymetal International PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Polymetal International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Impala Platinum Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Impala Platinum Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Impala Platinum reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Polymetal International and Impala Platinum

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

The idea behind Polymetal International PLC and Impala Platinum Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.