Correlation Between Prime Media and Apex Mining
Can any of the company-specific risk be diversified away by investing in both Prime Media 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 Prime Media and Apex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Media Holdings and Apex Mining Co, you can compare the effects of market volatilities on Prime Media 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 Prime Media with a short position of Apex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Media and Apex Mining.
Diversification Opportunities for Prime Media and Apex Mining
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Prime and Apex is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Prime Media Holdings and Apex Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Mining and Prime Media 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 Prime Media Holdings 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 Prime Media i.e., Prime Media and Apex Mining go up and down completely randomly.
Pair Corralation between Prime Media and Apex Mining
Assuming the 90 days trading horizon Prime Media Holdings is expected to under-perform the Apex Mining. In addition to that, Prime Media is 1.66 times more volatile than Apex Mining Co. It trades about -0.47 of its total potential returns per unit of risk. Apex Mining Co is currently generating about -0.41 per unit of volatility. If you would invest 425.00 in Apex Mining Co on September 1, 2024 and sell it today you would lose (66.00) from holding Apex Mining Co or give up 15.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Media Holdings vs. Apex Mining Co
Performance |
| Timeline |
| Prime Media Holdings |
| Apex Mining |
Prime Media and Apex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Media and Apex Mining
The main advantage of trading using opposite Prime Media and Apex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Media 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.| Prime Media vs. GT Capital Holdings | Prime Media vs. Allhome Corp | Prime Media vs. Jollibee Foods Corp | Prime Media vs. LFM Properties 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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