Correlation Between Cebu Air and Apex Mining
Can any of the company-specific risk be diversified away by investing in both Cebu Air and Apex Mining 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 Cebu Air and Apex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cebu Air Preferred and Apex Mining Co, you can compare the effects of market volatilities on Cebu Air and Apex Mining 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 Cebu Air with a short position of Apex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and Apex Mining.
Diversification Opportunities for Cebu Air and Apex Mining
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cebu and Apex is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air Preferred and Apex Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Mining and Cebu Air 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 Cebu Air Preferred are associated (or correlated) with Apex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Mining has no effect on the direction of Cebu Air i.e., Cebu Air and Apex Mining go up and down completely randomly.
Pair Corralation between Cebu Air and Apex Mining
Assuming the 90 days trading horizon Cebu Air Preferred is expected to under-perform the Apex Mining. But the stock apears to be less risky and, when comparing its historical volatility, Cebu Air Preferred is 1.63 times less risky than Apex Mining. The stock trades about -0.01 of its potential returns per unit of risk. The Apex Mining Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 274.00 in Apex Mining Co on August 31, 2024 and sell it today you would earn a total of 85.00 from holding Apex Mining Co or generate 31.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Cebu Air Preferred vs. Apex Mining Co
Performance |
| Timeline |
| Cebu Air Preferred |
| Apex Mining |
Cebu Air and Apex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cebu Air and Apex Mining
The main advantage of trading using opposite Cebu Air and Apex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Air position performs unexpectedly, Apex Mining 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 Apex Mining will offset losses from the drop in Apex Mining's long position.| Cebu Air vs. Apex Mining Co | Cebu Air vs. Lepanto Consolidated Mining | Cebu Air vs. Premiere Entertainment | Cebu Air vs. Globe Telecom |
| Apex Mining vs. Philex Mining Corp | Apex Mining vs. Atlas Consolidated Mining | Apex Mining vs. Lepanto Consolidated Mining | Apex Mining vs. Manila Mining 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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