Correlation Between Philex Mining and Nickel Asia

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

Diversification Opportunities for Philex Mining and Nickel Asia

-0.44

Correlation Coefficient

Philex Mining  Nickel Asia

Very good diversification

The 3 months correlation between Philex and Nickel is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Philex Mining Corp and Nickel Asia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Asia 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 Nickel Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Asia Corp has no effect on the direction of Philex Mining i.e., Philex Mining and Nickel Asia go up and down completely randomly.

Pair Corralation between Philex Mining and Nickel Asia

Assuming the 90 days trading horizon Philex Mining Corp is expected to generate 1.25 times more return on investment than Nickel Asia. However, Philex Mining is 1.25 times more volatile than Nickel Asia Corp. It trades about 0.36 of its potential returns per unit of risk. Nickel Asia Corp is currently generating about -0.16 per unit of risk. If you would invest  278.00  in Philex Mining Corp on December 27, 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Philex Mining Corp  vs.  Nickel Asia 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 weak basic indicators, Philex Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nickel Asia Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nickel Asia 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Philex Mining and Nickel Asia

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

The idea behind Philex Mining Corp and Nickel Asia 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.