Correlation Between Platinum Group and Smith Nephew
Can any of the company-specific risk be diversified away by investing in both Platinum Group and Smith Nephew 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 Group and Smith Nephew into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Group Metals and Smith Nephew SNATS, you can compare the effects of market volatilities on Platinum Group and Smith Nephew 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 Group with a short position of Smith Nephew. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Group and Smith Nephew.
Diversification Opportunities for Platinum Group and Smith Nephew
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Platinum and Smith is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Group Metals and Smith Nephew SNATS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smith Nephew SNATS and Platinum Group 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 Group Metals are associated (or correlated) with Smith Nephew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smith Nephew SNATS has no effect on the direction of Platinum Group i.e., Platinum Group and Smith Nephew go up and down completely randomly.
Pair Corralation between Platinum Group and Smith Nephew
Considering the 90-day investment horizon Platinum Group Metals is expected to generate 3.06 times more return on investment than Smith Nephew. However, Platinum Group is 3.06 times more volatile than Smith Nephew SNATS. It trades about 0.09 of its potential returns per unit of risk. Smith Nephew SNATS is currently generating about -0.07 per unit of risk. If you would invest 171.00 in Platinum Group Metals on August 31, 2025 and sell it today you would earn a total of 45.00 from holding Platinum Group Metals or generate 26.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Group Metals vs. Smith Nephew SNATS
Performance |
| Timeline |
| Platinum Group Metals |
| Smith Nephew SNATS |
Platinum Group and Smith Nephew Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Group and Smith Nephew
The main advantage of trading using opposite Platinum Group and Smith Nephew positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Group position performs unexpectedly, Smith Nephew 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 Smith Nephew will offset losses from the drop in Smith Nephew's long position.| Platinum Group vs. Kingdee International Software | Platinum Group vs. Pintec Technology Holdings | Platinum Group vs. NETCLASS TECHNOLOGY INC | Platinum Group vs. Orion Office Reit |
| Smith Nephew vs. MAIA Biotechnology | Smith Nephew vs. Technology Telecommunication Acquisition | Smith Nephew vs. Vir Biotechnology | Smith Nephew vs. Alarum Technologies |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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