Correlation Between Apex Mining and Now Corp

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

Diversification Opportunities for Apex Mining and Now Corp

0.63

Correlation Coefficient

Apex Mining  Now Corp

Poor diversification

The 3 months correlation between Apex and Now is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Apex Mining Co and Now Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Now Corp 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 Now Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Now Corp has no effect on the direction of Apex Mining i.e., Apex Mining and Now Corp go up and down completely randomly.

Pair Corralation between Apex Mining and Now Corp

Assuming the 90 days trading horizon Apex Mining Co is expected to generate 0.85 times more return on investment than Now Corp. However, Apex Mining Co is 1.18 times less risky than Now Corp. It trades about -0.03 of its potential returns per unit of risk. Now Corp is currently generating about -0.12 per unit of risk. If you would invest  391.00  in Apex Mining Co on October 9, 2024 and sell it today you would lose (11.00) from holding Apex Mining Co or give up 2.81% of portfolio value over 90 days.

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

Apex Mining Co  vs.  Now Corp

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.

Now Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Now Corp 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 February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Apex Mining and Now Corp

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

The idea behind Apex Mining Co and Now 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.