Correlation Between Philex Mining and Atok Big

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

By analyzing existing cross correlation between Philex Mining Corp and Atok Big Wedge, you can compare the effects of market volatilities on Philex Mining and Atok Big 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 Philex Mining with a short position of Atok Big. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philex Mining and Atok Big.

Diversification Opportunities for Philex Mining and Atok Big

-0.15

Correlation Coefficient

Philex Mining  Atok Big

Good diversification

The 3 months correlation between Philex and Atok is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Philex Mining Corp and Atok Big Wedge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atok Big Wedge and Philex 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 Philex Mining Corp are associated (or correlated) with Atok Big. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atok Big Wedge has no effect on the direction of Philex Mining i.e., Philex Mining and Atok Big go up and down completely randomly.

Pair Corralation between Philex Mining and Atok Big

Assuming the 90 days trading horizon Philex Mining Corp is expected to generate 1.23 times more return on investment than Atok Big. However, Philex Mining is 1.23 times more volatile than Atok Big Wedge. It trades about 0.36 of its potential returns per unit of risk. Atok Big Wedge is currently generating about 0.03 per unit of risk. If you would invest  278.00  in Philex Mining Corp on December 28, 2024 and sell it today you would earn a total of  442.00  from holding Philex Mining Corp or generate 158.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Philex Mining Corp  vs.  Atok Big Wedge

Philex Mining Corp

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Philex Mining Corp are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Philex Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Atok Big Wedge

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atok Big Wedge are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Atok Big is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Philex Mining and Atok Big

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

The idea behind Philex Mining Corp and Atok Big Wedge 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 Valuation module to check real value of public entities based on technical and fundamental data.