Correlation Between Apex Mining and Alliance Global

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

Diversification Opportunities for Apex Mining and Alliance Global

-0.81

Correlation Coefficient

Apex Mining  Alliance Global

Pay attention - limited upside

The 3 months correlation between Apex and Alliance is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Apex Mining Co and Alliance Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Global Group 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 Alliance Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Global Group has no effect on the direction of Apex Mining i.e., Apex Mining and Alliance Global go up and down completely randomly.

Pair Corralation between Apex Mining and Alliance Global

Assuming the 90 days trading horizon Apex Mining Co is expected to generate 0.57 times more return on investment than Alliance Global. However, Apex Mining Co is 1.77 times less risky than Alliance Global. It trades about 0.31 of its potential returns per unit of risk. Alliance Global Group is currently generating about -0.13 per unit of risk. If you would invest  333.00  in Apex Mining Co on December 23, 2024 and sell it today you would earn a total of  162.00  from holding Apex Mining Co or generate 48.65% return on investment over 90 days.

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

Apex Mining Co  vs.  Alliance Global Group

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 24 (%) 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.

Alliance Global Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alliance Global Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Apex Mining and Alliance Global

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

The idea behind Apex Mining Co and Alliance Global Group 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.