Correlation Between Philex Mining and Acesite Hotel

Can any of the company-specific risk be diversified away by investing in both Philex Mining and Acesite Hotel 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 Acesite Hotel 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 Acesite Hotel Corp, you can compare the effects of market volatilities on Philex Mining and Acesite Hotel 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 Acesite Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philex Mining and Acesite Hotel.

Diversification Opportunities for Philex Mining and Acesite Hotel

-0.54

Correlation Coefficient

Philex Mining  Acesite Hotel

Excellent diversification

The 3 months correlation between Philex and Acesite is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Philex Mining Corp and Acesite Hotel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acesite Hotel Corp 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 Acesite Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acesite Hotel Corp has no effect on the direction of Philex Mining i.e., Philex Mining and Acesite Hotel go up and down completely randomly.

Pair Corralation between Philex Mining and Acesite Hotel

Assuming the 90 days trading horizon Philex Mining Corp is expected to generate 0.44 times more return on investment than Acesite Hotel. However, Philex Mining Corp is 2.3 times less risky than Acesite Hotel. It trades about 0.37 of its potential returns per unit of risk. Acesite Hotel Corp is currently generating about -0.02 per unit of risk. If you would invest  276.00  in Philex Mining Corp on December 21, 2024 and sell it today you would earn a total of  432.00  from holding Philex Mining Corp or generate 156.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	38.98%
Values	Daily Returns

Philex Mining Corp  vs.  Acesite Hotel Corp

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.

Acesite Hotel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acesite Hotel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Philex Mining and Acesite Hotel

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

The idea behind Philex Mining Corp and Acesite Hotel Corp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.