Correlation Between East West and Apex Mining
Can any of the company-specific risk be diversified away by investing in both East West 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 East West and Apex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East West Banking and Apex Mining Co, you can compare the effects of market volatilities on East West 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 East West with a short position of Apex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of East West and Apex Mining.
Diversification Opportunities for East West and Apex Mining
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between East and Apex is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding East West Banking and Apex Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Mining and East West 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 East West Banking 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 East West i.e., East West and Apex Mining go up and down completely randomly.
Pair Corralation between East West and Apex Mining
Assuming the 90 days trading horizon East West is expected to generate 2.24 times less return on investment than Apex Mining. But when comparing it to its historical volatility, East West Banking is 2.09 times less risky than Apex Mining. It trades about 0.07 of its potential returns per unit of risk. Apex Mining Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 278.00 in Apex Mining Co on November 3, 2024 and sell it today you would earn a total of 120.00 from holding Apex Mining Co or generate 43.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
East West Banking vs. Apex Mining Co
Performance |
| Timeline |
| East West Banking |
| Apex Mining |
East West and Apex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East West and Apex Mining
The main advantage of trading using opposite East West and Apex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East West 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.| East West vs. Metro Retail Stores | East West vs. Robinsons Retail Holdings | East West vs. Jollibee Foods Corp | East West vs. Semirara Mining Corp |
| Apex Mining vs. First Abacus Financial | Apex Mining vs. Transpacific Broadband Group | Apex Mining vs. Converge Information Communications | Apex Mining vs. Globe Telecom |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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