Correlation Between Apex Mining and Converge Information
Can any of the company-specific risk be diversified away by investing in both Apex Mining and Converge Information 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 Converge Information 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 Converge Information Communications, you can compare the effects of market volatilities on Apex Mining and Converge Information 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 Converge Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apex Mining and Converge Information.
Diversification Opportunities for Apex Mining and Converge Information
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Apex and Converge is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Apex Mining Co and Converge Information Communica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Information 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 Converge Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Information has no effect on the direction of Apex Mining i.e., Apex Mining and Converge Information go up and down completely randomly.
Pair Corralation between Apex Mining and Converge Information
Assuming the 90 days trading horizon Apex Mining Co is expected to under-perform the Converge Information. But the stock apears to be less risky and, when comparing its historical volatility, Apex Mining Co is 1.34 times less risky than Converge Information. The stock trades about -0.36 of its potential returns per unit of risk. The Converge Information Communications is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,694 in Converge Information Communications on August 28, 2024 and sell it today you would lose (70.00) from holding Converge Information Communications or give up 4.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apex Mining Co vs. Converge Information Communica
Performance |
| Timeline |
| Apex Mining |
| Converge Information |
Apex Mining and Converge Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apex Mining and Converge Information
The main advantage of trading using opposite Apex Mining and Converge Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apex Mining position performs unexpectedly, Converge Information 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 Converge Information will offset losses from the drop in Converge Information's long position.| Apex Mining vs. Figaro Coffee Group | Apex Mining vs. Integrated Micro Electronics | Apex Mining vs. BDO Unibank | Apex Mining vs. Security Bank Corp |
| Converge Information vs. Globe Telecom | Converge Information vs. Century Pacific Food | Converge Information vs. Semirara Mining Corp | Converge Information 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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