Correlation Between National Reinsurance and Apex Mining
Can any of the company-specific risk be diversified away by investing in both National Reinsurance 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 National Reinsurance and Apex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Reinsurance and Apex Mining Co, you can compare the effects of market volatilities on National Reinsurance 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 National Reinsurance with a short position of Apex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Reinsurance and Apex Mining.
Diversification Opportunities for National Reinsurance and Apex Mining
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Apex is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding National Reinsurance and Apex Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Mining and National Reinsurance 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 National Reinsurance 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 National Reinsurance i.e., National Reinsurance and Apex Mining go up and down completely randomly.
Pair Corralation between National Reinsurance and Apex Mining
Assuming the 90 days trading horizon National Reinsurance is expected to generate 2.77 times more return on investment than Apex Mining. However, National Reinsurance is 2.77 times more volatile than Apex Mining Co. It trades about 0.04 of its potential returns per unit of risk. Apex Mining Co is currently generating about 0.07 per unit of risk. If you would invest 56.00 in National Reinsurance on September 14, 2024 and sell it today you would earn a total of 12.00 from holding National Reinsurance or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 59.46% |
| Values | Daily Returns |
National Reinsurance vs. Apex Mining Co
Performance |
| Timeline |
| National Reinsurance |
| Apex Mining |
National Reinsurance and Apex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Reinsurance and Apex Mining
The main advantage of trading using opposite National Reinsurance and Apex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Reinsurance 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.| National Reinsurance vs. GT Capital Holdings | National Reinsurance vs. Allhome Corp | National Reinsurance vs. Jollibee Foods Corp | National Reinsurance vs. LFM Properties Corp |
| Apex Mining vs. Nickel Asia Corp | Apex Mining vs. Atok Big Wedge | Apex Mining vs. Philex Mining Corp | Apex Mining vs. Atlas Consolidated Mining |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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