Correlation Between Apex Mining and Filinvest Development

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

Diversification Opportunities for Apex Mining and Filinvest Development

0.47

Correlation Coefficient

Apex Mining  Filinvest Development

Very weak diversification

The 3 months correlation between Apex and Filinvest is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Apex Mining Co and Filinvest Development Coprorat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filinvest Development 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 Filinvest Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filinvest Development has no effect on the direction of Apex Mining i.e., Apex Mining and Filinvest Development go up and down completely randomly.

Pair Corralation between Apex Mining and Filinvest Development

Assuming the 90 days trading horizon Apex Mining Co is expected to under-perform the Filinvest Development. But the stock apears to be less risky and, when comparing its historical volatility, Apex Mining Co is 1.21 times less risky than Filinvest Development. The stock trades about -0.12 of its potential returns per unit of risk. The Filinvest Development Coproration is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  545.00  in Filinvest Development Coproration on September 15, 2024 and sell it today you would lose (55.00) from holding Filinvest Development Coproration or give up 10.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.75%
Values	Daily Returns

Apex Mining Co  vs.  Filinvest Development Coprorat

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Filinvest Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Filinvest Development Coproration 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.

Pair Trading with Apex Mining and Filinvest Development

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

The idea behind Apex Mining Co and Filinvest Development Coproration 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.