Correlation Between Apex Mining and Alliance Global
Can any of the company-specific risk be diversified away by investing in both Apex Mining and Alliance Global 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 Apex Mining and Alliance Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apex Mining Co and Alliance Global Group, you can compare the effects of market volatilities on Apex Mining and Alliance Global 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 Apex Mining with a short position of Alliance Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apex Mining and Alliance Global.
Diversification Opportunities for Apex Mining and Alliance Global
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apex and Alliance is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Apex Mining Co and Alliance Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Global Group and Apex Mining 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 Apex Mining Co are associated (or correlated) with Alliance Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Global Group has no effect on the direction of Apex Mining i.e., Apex Mining and Alliance Global go up and down completely randomly.
Pair Corralation between Apex Mining and Alliance Global
Assuming the 90 days trading horizon Apex Mining Co is expected to under-perform the Alliance Global. In addition to that, Apex Mining is 1.55 times more volatile than Alliance Global Group. It trades about -0.41 of its total potential returns per unit of risk. Alliance Global Group is currently generating about -0.17 per unit of volatility. If you would invest 921.00 in Alliance Global Group on September 1, 2024 and sell it today you would lose (43.00) from holding Alliance Global Group or give up 4.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Apex Mining Co vs. Alliance Global Group
Performance |
| Timeline |
| Apex Mining |
| Alliance Global Group |
Apex Mining and Alliance Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apex Mining and Alliance Global
The main advantage of trading using opposite Apex Mining and Alliance Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apex Mining position performs unexpectedly, Alliance Global 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 Alliance Global will offset losses from the drop in Alliance Global's long position.The idea behind Apex Mining Co and Alliance Global Group 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.| Alliance Global vs. GT Capital Holdings | Alliance Global vs. Allhome Corp | Alliance Global vs. Jollibee Foods Corp | Alliance Global vs. LFM Properties Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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