Correlation Between Apex Mining and Basic Energy
Can any of the company-specific risk be diversified away by investing in both Apex Mining and Basic Energy 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 Basic Energy 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 Basic Energy Corp, you can compare the effects of market volatilities on Apex Mining and Basic Energy 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 Basic Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apex Mining and Basic Energy.
Diversification Opportunities for Apex Mining and Basic Energy
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apex and Basic is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Apex Mining Co and Basic Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basic Energy Corp 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 Basic Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basic Energy Corp has no effect on the direction of Apex Mining i.e., Apex Mining and Basic Energy go up and down completely randomly.
Pair Corralation between Apex Mining and Basic Energy
Assuming the 90 days trading horizon Apex Mining Co is expected to under-perform the Basic Energy. But the stock apears to be less risky and, when comparing its historical volatility, Apex Mining Co is 2.14 times less risky than Basic Energy. The stock trades about -0.07 of its potential returns per unit of risk. The Basic Energy Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Basic Energy Corp on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Basic Energy Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apex Mining Co vs. Basic Energy Corp
Performance |
| Timeline |
| Apex Mining |
| Basic Energy Corp |
Apex Mining and Basic Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apex Mining and Basic Energy
The main advantage of trading using opposite Apex Mining and Basic Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apex Mining position performs unexpectedly, Basic Energy 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 Basic Energy will offset losses from the drop in Basic Energy's long position.| Apex Mining vs. Nickel Asia Corp | Apex Mining vs. Atok Big Wedge | Apex Mining vs. Philex Mining Corp | Apex Mining vs. Atlas Consolidated Mining |
| Basic Energy vs. Transpacific Broadband Group | Basic Energy vs. Century Pacific Food | Basic Energy vs. Apex Mining Co | Basic Energy vs. Top Frontier Investment |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Commodity Directory Find actively traded commodities issued by global exchanges |