Correlation Between Apex Resources and Apple

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

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

Diversification Opportunities for Apex Resources and Apple

0.0

Correlation Coefficient

Apex Resources  Apple

Pay attention - limited upside

The 3 months correlation between Apex and Apple is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Apex Resources and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Apex Resources 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 Apex Resources are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Apex Resources i.e., Apex Resources and Apple go up and down completely randomly.

Pair Corralation between Apex Resources and Apple

Assuming the 90 days horizon Apex Resources is expected to generate 12.85 times more return on investment than Apple. However, Apex Resources is 12.85 times more volatile than Apple Inc. It trades about 0.05 of its potential returns per unit of risk. Apple Inc is currently generating about 0.03 per unit of risk. If you would invest  5.96  in Apex Resources on February 3, 2024 and sell it today you would lose (1.20) from holding Apex Resources or give up 20.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Apex Resources  vs.  Apple Inc

Apex Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apex Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Apex Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Apple Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Apex Resources and Apple

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

The idea behind Apex Resources and Apple Inc 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.