Correlation Between Apex Mining and Metro Retail
Can any of the company-specific risk be diversified away by investing in both Apex Mining and Metro Retail 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 Metro Retail 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 Metro Retail Stores, you can compare the effects of market volatilities on Apex Mining and Metro Retail 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 Metro Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apex Mining and Metro Retail.
Diversification Opportunities for Apex Mining and Metro Retail
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Apex and Metro is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Apex Mining Co and Metro Retail Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Retail Stores 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 Metro Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Retail Stores has no effect on the direction of Apex Mining i.e., Apex Mining and Metro Retail go up and down completely randomly.
Pair Corralation between Apex Mining and Metro Retail
Assuming the 90 days trading horizon Apex Mining Co is expected to under-perform the Metro Retail. In addition to that, Apex Mining is 1.21 times more volatile than Metro Retail Stores. It trades about -0.42 of its total potential returns per unit of risk. Metro Retail Stores is currently generating about -0.02 per unit of volatility. If you would invest 120.00 in Metro Retail Stores on August 24, 2024 and sell it today you would lose (1.00) from holding Metro Retail Stores or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Apex Mining Co vs. Metro Retail Stores
Performance |
| Timeline |
| Apex Mining |
| Metro Retail Stores |
Apex Mining and Metro Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apex Mining and Metro Retail
The main advantage of trading using opposite Apex Mining and Metro Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apex Mining position performs unexpectedly, Metro Retail 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 Metro Retail will offset losses from the drop in Metro Retail's long position.| Apex Mining vs. Philex Mining Corp | Apex Mining vs. Transpacific Broadband Group | Apex Mining vs. Premiere Entertainment | Apex Mining vs. Alliance Select Foods |
| Metro Retail vs. Allhome Corp | Metro Retail vs. Jollibee Foods Corp | Metro Retail vs. LFM Properties Corp | Metro Retail vs. PXP Energy 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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