Correlation Between Alliance Global and Philex Mining
Can any of the company-specific risk be diversified away by investing in both Alliance Global and Philex Mining 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 Alliance Global and Philex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Global Group and Philex Mining Corp, you can compare the effects of market volatilities on Alliance Global and Philex Mining 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 Alliance Global with a short position of Philex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Global and Philex Mining.
Diversification Opportunities for Alliance Global and Philex Mining
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alliance and Philex is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Global Group and Philex Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philex Mining Corp and Alliance Global 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 Alliance Global Group are associated (or correlated) with Philex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philex Mining Corp has no effect on the direction of Alliance Global i.e., Alliance Global and Philex Mining go up and down completely randomly.
Pair Corralation between Alliance Global and Philex Mining
Assuming the 90 days trading horizon Alliance Global Group is expected to under-perform the Philex Mining. In addition to that, Alliance Global is 1.05 times more volatile than Philex Mining Corp. It trades about -0.05 of its total potential returns per unit of risk. Philex Mining Corp is currently generating about 0.04 per unit of volatility. If you would invest 282.00 in Philex Mining Corp on September 14, 2024 and sell it today you would earn a total of 3.00 from holding Philex Mining Corp or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Alliance Global Group vs. Philex Mining Corp
Performance |
| Timeline |
| Alliance Global Group |
| Philex Mining Corp |
Alliance Global and Philex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Global and Philex Mining
The main advantage of trading using opposite Alliance Global and Philex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Global position performs unexpectedly, Philex Mining 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 Philex Mining will offset losses from the drop in Philex Mining's long position.| Alliance Global vs. Philex Mining Corp | Alliance Global vs. Megawide Construction Corp | Alliance Global vs. Semirara Mining Corp | Alliance Global vs. Crown Asia Chemicals |
| Philex Mining vs. Apex Mining Co | Philex Mining vs. Top Frontier Investment | Philex Mining vs. Asia United Bank | Philex Mining vs. Converge Information Communications |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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