Correlation Between DMCI Holdings and Apex Mining

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

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

Diversification Opportunities for DMCI Holdings and Apex Mining

0.7

Correlation Coefficient

DMCI Holdings  Apex Mining

Poor diversification

The 3 months correlation between DMCI and Apex is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding DMCI Holdings and Apex Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Mining and DMCI Holdings 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 DMCI Holdings 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 DMCI Holdings i.e., DMCI Holdings and Apex Mining go up and down completely randomly.

Pair Corralation between DMCI Holdings and Apex Mining

Assuming the 90 days trading horizon DMCI Holdings is expected to generate 3.26 times less return on investment than Apex Mining. But when comparing it to its historical volatility, DMCI Holdings is 2.12 times less risky than Apex Mining. It trades about 0.21 of its potential returns per unit of risk. Apex Mining Co is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  351.00  in Apex Mining Co on October 15, 2024 and sell it today you would earn a total of  45.00  from holding Apex Mining Co or generate 12.82% return on investment over 90 days.

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

DMCI Holdings  vs.  Apex Mining Co

DMCI Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DMCI Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, DMCI Holdings is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Apex Mining

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with DMCI Holdings and Apex Mining

The main advantage of trading using opposite DMCI Holdings and Apex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMCI Holdings 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 DMCI Holdings 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.