Correlation Between Apex Mining and Nickel Asia
Can any of the company-specific risk be diversified away by investing in both Apex Mining and Nickel Asia 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 Nickel Asia 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 Nickel Asia Corp, you can compare the effects of market volatilities on Apex Mining and Nickel Asia 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 Nickel Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apex Mining and Nickel Asia.
Diversification Opportunities for Apex Mining and Nickel Asia
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apex and Nickel is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Apex Mining Co and Nickel Asia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Asia 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 Nickel Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Asia Corp has no effect on the direction of Apex Mining i.e., Apex Mining and Nickel Asia go up and down completely randomly.
Pair Corralation between Apex Mining and Nickel Asia
Assuming the 90 days trading horizon Apex Mining Co is expected to generate 1.06 times more return on investment than Nickel Asia. However, Apex Mining is 1.06 times more volatile than Nickel Asia Corp. It trades about 0.05 of its potential returns per unit of risk. Nickel Asia Corp is currently generating about -0.09 per unit of risk. If you would invest 288.00 in Apex Mining Co on September 14, 2024 and sell it today you would earn a total of 71.00 from holding Apex Mining Co or generate 24.65% 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. Nickel Asia Corp
Performance |
| Timeline |
| Apex Mining |
| Nickel Asia Corp |
Apex Mining and Nickel Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apex Mining and Nickel Asia
The main advantage of trading using opposite Apex Mining and Nickel Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apex Mining position performs unexpectedly, Nickel Asia 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 Nickel Asia will offset losses from the drop in Nickel Asia'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 |
| Nickel Asia vs. Converge Information Communications | Nickel Asia vs. Apex Mining Co | Nickel Asia vs. SM Investments Corp | Nickel Asia vs. National Reinsurance |
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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