Correlation Between Apex Mining and Atlas Consolidated

Can any of the company-specific risk be diversified away by investing in both Apex Mining and Atlas Consolidated 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 Atlas Consolidated 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 Atlas Consolidated Mining, you can compare the effects of market volatilities on Apex Mining and Atlas Consolidated 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 Atlas Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apex Mining and Atlas Consolidated.

Diversification Opportunities for Apex Mining and Atlas Consolidated

0.52

Correlation Coefficient

Apex Mining  Atlas Consolidated

Very weak diversification

The 3 months correlation between Apex and Atlas is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Apex Mining Co and Atlas Consolidated Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Consolidated Mining 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 Atlas Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Consolidated Mining has no effect on the direction of Apex Mining i.e., Apex Mining and Atlas Consolidated go up and down completely randomly.

Pair Corralation between Apex Mining and Atlas Consolidated

Assuming the 90 days trading horizon Apex Mining Co is expected to under-perform the Atlas Consolidated. In addition to that, Apex Mining is 1.05 times more volatile than Atlas Consolidated Mining. It trades about -0.07 of its total potential returns per unit of risk. Atlas Consolidated Mining is currently generating about 0.02 per unit of volatility. If you would invest  405.00  in Atlas Consolidated Mining on September 3, 2024 and sell it today you would earn a total of  6.00  from holding Atlas Consolidated Mining or generate 1.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Apex Mining Co  vs.  Atlas Consolidated Mining

Apex Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apex Mining Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Atlas Consolidated Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Consolidated Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Atlas Consolidated is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Apex Mining and Atlas Consolidated

The main advantage of trading using opposite Apex Mining and Atlas Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apex Mining position performs unexpectedly, Atlas Consolidated 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 Atlas Consolidated will offset losses from the drop in Atlas Consolidated's long position.

The idea behind Apex Mining Co and Atlas Consolidated Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.