Correlation Between Apex Mining and Cirtek Holdings

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

Diversification Opportunities for Apex Mining and Cirtek Holdings

0.43

Correlation Coefficient

Apex Mining  Cirtek Holdings

Very weak diversification

The 3 months correlation between Apex and Cirtek is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Apex Mining Co and Cirtek Holdings Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirtek Holdings Phil 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 Cirtek Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirtek Holdings Phil has no effect on the direction of Apex Mining i.e., Apex Mining and Cirtek Holdings go up and down completely randomly.

Pair Corralation between Apex Mining and Cirtek Holdings

Assuming the 90 days trading horizon Apex Mining Co is expected to generate 0.4 times more return on investment than Cirtek Holdings. However, Apex Mining Co is 2.48 times less risky than Cirtek Holdings. It trades about 0.06 of its potential returns per unit of risk. Cirtek Holdings Philippines is currently generating about 0.01 per unit of risk. If you would invest  212.00  in Apex Mining Co on October 12, 2024 and sell it today you would earn a total of  176.00  from holding Apex Mining Co or generate 83.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	43.13%
Values	Daily Returns

Apex Mining Co  vs.  Cirtek Holdings Philippines

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Cirtek Holdings Phil

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Cirtek Holdings Philippines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively unsteady fundamental drivers, Cirtek Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apex Mining and Cirtek Holdings

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

The idea behind Apex Mining Co and Cirtek Holdings Philippines 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.