Correlation Between Philex Mining and Nickel Asia

Can any of the company-specific risk be diversified away by investing in both Philex Mining and Nickel Asia 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 Philex Mining and Nickel Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Philex Mining Corp and Nickel Asia Corp, you can compare the effects of market volatilities on Philex Mining and Nickel Asia 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 Philex Mining with a short position of Nickel Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philex Mining and Nickel Asia.

Diversification Opportunities for Philex Mining and Nickel Asia

0.55

Correlation Coefficient

Philex Mining  Nickel Asia

Very weak diversification

The 3 months correlation between Philex and Nickel is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Philex Mining Corp and Nickel Asia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Asia Corp and Philex 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 Philex Mining Corp are associated (or correlated) with Nickel Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Asia Corp has no effect on the direction of Philex Mining i.e., Philex Mining and Nickel Asia go up and down completely randomly.

Pair Corralation between Philex Mining and Nickel Asia

Assuming the 90 days trading horizon Philex Mining Corp is expected to under-perform the Nickel Asia. But the stock apears to be less risky and, when comparing its historical volatility, Philex Mining Corp is 1.1 times less risky than Nickel Asia. The stock trades about -0.01 of its potential returns per unit of risk. The Nickel Asia Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  321.00  in Nickel Asia Corp on September 15, 2024 and sell it today you would lose (9.00) from holding Nickel Asia Corp or give up 2.8% of portfolio value over 90 days.

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

Philex Mining Corp  vs.  Nickel Asia Corp

Philex Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Philex Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Philex Mining is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Nickel Asia Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nickel Asia Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nickel Asia is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Philex Mining and Nickel Asia

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

The idea behind Philex Mining Corp and Nickel Asia Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.