Correlation Between Prime Media and Apex Mining

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

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

Diversification Opportunities for Prime Media and Apex Mining

0.05

Correlation Coefficient

Prime Media  Apex Mining

Significant diversification

The 3 months correlation between Prime and Apex is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Prime Media 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 Prime Media 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 Prime Media 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 Prime Media i.e., Prime Media and Apex Mining go up and down completely randomly.

Pair Corralation between Prime Media and Apex Mining

Assuming the 90 days trading horizon Prime Media Holdings is expected to under-perform the Apex Mining. In addition to that, Prime Media is 2.41 times more volatile than Apex Mining Co. It trades about -0.02 of its total potential returns per unit of risk. Apex Mining Co is currently generating about 0.13 per unit of volatility. If you would invest  366.00  in Apex Mining Co on November 20, 2024 and sell it today you would earn a total of  54.00  from holding Apex Mining Co or generate 14.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.83%
Values	Daily Returns

Prime Media Holdings  vs.  Apex Mining Co

Prime Media Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prime Media Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Apex Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apex Mining Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Apex Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Prime Media and Apex Mining

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

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.