Correlation Between Global Ferronickel and Apex Mining

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

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

Diversification Opportunities for Global Ferronickel and Apex Mining

0.81

Correlation Coefficient

Global Ferronickel  Apex Mining

Very poor diversification

The 3 months correlation between Global and Apex is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Global Ferronickel 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 Global Ferronickel 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 Global Ferronickel 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 Global Ferronickel i.e., Global Ferronickel and Apex Mining go up and down completely randomly.

Pair Corralation between Global Ferronickel and Apex Mining

Assuming the 90 days trading horizon Global Ferronickel Holdings is expected to under-perform the Apex Mining. In addition to that, Global Ferronickel is 1.22 times more volatile than Apex Mining Co. It trades about -0.52 of its total potential returns per unit of risk. Apex Mining Co is currently generating about -0.34 per unit of volatility. If you would invest  367.00  in Apex Mining Co on September 24, 2024 and sell it today you would lose (37.00) from holding Apex Mining Co or give up 10.08% of portfolio value over 90 days.

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

Global Ferronickel Holdings  vs.  Apex Mining Co

Global Ferronickel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Ferronickel Holdings 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.

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 Global Ferronickel and Apex Mining

The main advantage of trading using opposite Global Ferronickel and Apex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ferronickel 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 Global Ferronickel 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.