Correlation Between Apex Mining and First Philippine

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

Diversification Opportunities for Apex Mining and First Philippine

0.49

Correlation Coefficient

Apex Mining  First Philippine

Very weak diversification

The 3 months correlation between Apex and First is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Apex Mining Co and First Philippine Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Philippine Holdings 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 First Philippine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Philippine Holdings has no effect on the direction of Apex Mining i.e., Apex Mining and First Philippine go up and down completely randomly.

Pair Corralation between Apex Mining and First Philippine

Assuming the 90 days trading horizon Apex Mining Co is expected to generate 2.48 times more return on investment than First Philippine. However, Apex Mining is 2.48 times more volatile than First Philippine Holdings. It trades about 0.22 of its potential returns per unit of risk. First Philippine Holdings is currently generating about 0.13 per unit of risk. If you would invest  346.00  in Apex Mining Co on October 7, 2024 and sell it today you would earn a total of  33.00  from holding Apex Mining Co or generate 9.54% 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.  First Philippine Holdings

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 rather sound technical and fundamental indicators, Apex Mining is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

First Philippine Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in First Philippine Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, First Philippine is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Apex Mining and First Philippine

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

The idea behind Apex Mining Co and First Philippine Holdings 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.