Correlation Between Ayala Land and Apex Mining

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

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

Diversification Opportunities for Ayala Land and Apex Mining

-0.72

Correlation Coefficient

Ayala Land  Apex Mining

Pay attention - limited upside

The 3 months correlation between Ayala and Apex is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ayala Land and Apex Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Mining and Ayala Land 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 Ayala Land 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 Ayala Land i.e., Ayala Land and Apex Mining go up and down completely randomly.

Pair Corralation between Ayala Land and Apex Mining

Assuming the 90 days trading horizon Ayala Land is expected to under-perform the Apex Mining. In addition to that, Ayala Land is 1.33 times more volatile than Apex Mining Co. It trades about -0.07 of its total potential returns per unit of risk. Apex Mining Co is currently generating about 0.32 per unit of volatility. If you would invest  333.00  in Apex Mining Co on December 21, 2024 and sell it today you would earn a total of  165.00  from holding Apex Mining Co or generate 49.55% return on investment over 90 days.

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

Ayala Land  vs.  Apex Mining Co

Ayala Land

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ayala Land 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.

Apex Mining

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apex Mining Co are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Apex Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ayala Land and Apex Mining

The main advantage of trading using opposite Ayala Land and Apex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ayala Land 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.

The idea behind Ayala Land and Apex Mining Co 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 Commodity Directory module to find actively traded commodities issued by global exchanges.