Correlation Between America Great and Sylvania Platinum

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

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

Diversification Opportunities for America Great and Sylvania Platinum

-0.8

Correlation Coefficient

America Great  Sylvania Platinum

Pay attention - limited upside

The 3 months correlation between America and Sylvania is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding America Great Health and Sylvania Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sylvania Platinum and America Great 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 America Great Health are associated (or correlated) with Sylvania Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sylvania Platinum has no effect on the direction of America Great i.e., America Great and Sylvania Platinum go up and down completely randomly.

Pair Corralation between America Great and Sylvania Platinum

Given the investment horizon of 90 days America Great Health is expected to under-perform the Sylvania Platinum. In addition to that, America Great is 4.29 times more volatile than Sylvania Platinum Limited. It trades about -0.48 of its total potential returns per unit of risk. Sylvania Platinum Limited is currently generating about 0.17 per unit of volatility. If you would invest  82.00  in Sylvania Platinum Limited on February 6, 2024 and sell it today you would earn a total of  7.00  from holding Sylvania Platinum Limited or generate 8.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

America Great Health  vs.  Sylvania Platinum Limited

America Great Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days America Great Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Sylvania Platinum

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sylvania Platinum Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Sylvania Platinum reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with America Great and Sylvania Platinum

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

The idea behind America Great Health and Sylvania Platinum Limited 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..