Correlation Between Apex Mining and National Reinsurance

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

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

Diversification Opportunities for Apex Mining and National Reinsurance

0.22

Correlation Coefficient

Apex Mining  National Reinsurance

Modest diversification

The 3 months correlation between Apex and National is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Apex Mining Co and National Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Reinsurance and Apex 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 Apex Mining Co are associated (or correlated) with National Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Reinsurance has no effect on the direction of Apex Mining i.e., Apex Mining and National Reinsurance go up and down completely randomly.

Pair Corralation between Apex Mining and National Reinsurance

Assuming the 90 days trading horizon Apex Mining Co is expected to under-perform the National Reinsurance. In addition to that, Apex Mining is 1.3 times more volatile than National Reinsurance. It trades about -0.07 of its total potential returns per unit of risk. National Reinsurance is currently generating about 0.1 per unit of volatility. If you would invest  54.00  in National Reinsurance on April 21, 2025 and sell it today you would earn a total of  8.00  from holding National Reinsurance or generate 14.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Apex Mining Co  vs.  National Reinsurance

Apex Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apex Mining Co 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 August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

National Reinsurance

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in National Reinsurance are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, National Reinsurance unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apex Mining and National Reinsurance

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

The idea behind Apex Mining Co and National Reinsurance 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.

Check out your portfolio center.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.