Correlation Between ZKB Platinum and ZKB Palladium
Can any of the company-specific risk be diversified away by investing in both ZKB Platinum and ZKB Palladium 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 ZKB Platinum and ZKB Palladium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZKB Platinum ETF and ZKB Palladium ETF, you can compare the effects of market volatilities on ZKB Platinum and ZKB Palladium 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 ZKB Platinum with a short position of ZKB Palladium. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZKB Platinum and ZKB Palladium.
Diversification Opportunities for ZKB Platinum and ZKB Palladium
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ZKB and ZKB is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ZKB Platinum ETF and ZKB Palladium ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZKB Palladium ETF and ZKB 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 ZKB Platinum ETF are associated (or correlated) with ZKB Palladium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZKB Palladium ETF has no effect on the direction of ZKB Platinum i.e., ZKB Platinum and ZKB Palladium go up and down completely randomly.
Pair Corralation between ZKB Platinum and ZKB Palladium
Assuming the 90 days trading horizon ZKB Platinum ETF is expected to generate 1.07 times more return on investment than ZKB Palladium. However, ZKB Platinum is 1.07 times more volatile than ZKB Palladium ETF. It trades about 0.3 of its potential returns per unit of risk. ZKB Palladium ETF is currently generating about 0.24 per unit of risk. If you would invest 22,825 in ZKB Platinum ETF on April 21, 2025 and sell it today you would earn a total of 10,665 from holding ZKB Platinum ETF or generate 46.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZKB Platinum ETF vs. ZKB Palladium ETF
Performance |
| Timeline |
| ZKB Platinum ETF |
| ZKB Palladium ETF |
ZKB Platinum and ZKB Palladium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZKB Platinum and ZKB Palladium
The main advantage of trading using opposite ZKB Platinum and ZKB Palladium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZKB Platinum position performs unexpectedly, ZKB Palladium 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 ZKB Palladium will offset losses from the drop in ZKB Palladium's long position.| ZKB Platinum vs. iShares NASDAQ 100 | ZKB Platinum vs. BNP Paribas Easy | ZKB Platinum vs. SPDR MSCI EM | ZKB Platinum vs. UBS ETF Palladium |
| ZKB Palladium vs. iShares NASDAQ 100 | ZKB Palladium vs. BNP Paribas Easy | ZKB Palladium vs. SPDR MSCI EM | ZKB Palladium vs. UBS ETF Palladium |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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