Correlation Between Bank of Commerce and Apex Mining

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

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

Diversification Opportunities for Bank of Commerce and Apex Mining

0.74

Correlation Coefficient

Bank of Commerce  Apex Mining

Poor diversification

The 3 months correlation between Bank and Apex is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Commerce and Apex Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Mining and Bank of Commerce 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 Bank of Commerce 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 Bank of Commerce i.e., Bank of Commerce and Apex Mining go up and down completely randomly.

Pair Corralation between Bank of Commerce and Apex Mining

Assuming the 90 days trading horizon Bank of Commerce is expected to under-perform the Apex Mining. But the stock apears to be less risky and, when comparing its historical volatility, Bank of Commerce is 1.02 times less risky than Apex Mining. The stock trades about 0.0 of its potential returns per unit of risk. The Apex Mining Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  200.00  in Apex Mining Co on September 26, 2024 and sell it today you would earn a total of  133.00  from holding Apex Mining Co or generate 66.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.9%
Values	Daily Returns

Bank of Commerce  vs.  Apex Mining Co

Bank of Commerce

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank of Commerce has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Bank of Commerce and Apex Mining

The main advantage of trading using opposite Bank of Commerce and Apex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Commerce 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 Bank of Commerce 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.