Correlation Between Philippine Business and Apex Mining

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

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

Diversification Opportunities for Philippine Business and Apex Mining

-0.16

Correlation Coefficient

Philippine Business  Apex Mining

Good diversification

The 3 months correlation between Philippine and Apex is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Philippine Business Bank and Apex Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Mining and Philippine Business 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 Philippine Business Bank are associated (or correlated) with Apex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Mining has no effect on the direction of Philippine Business i.e., Philippine Business and Apex Mining go up and down completely randomly.

Pair Corralation between Philippine Business and Apex Mining

Assuming the 90 days trading horizon Philippine Business Bank is expected to generate 0.75 times more return on investment than Apex Mining. However, Philippine Business Bank is 1.34 times less risky than Apex Mining. It trades about 0.13 of its potential returns per unit of risk. Apex Mining Co is currently generating about -0.05 per unit of risk. If you would invest  755.00  in Philippine Business Bank on April 24, 2025 and sell it today you would earn a total of  133.00  from holding Philippine Business Bank or generate 17.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

Philippine Business Bank  vs.  Apex Mining Co

Philippine Business Bank

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Philippine Business Bank are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Philippine Business exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Philippine Business and Apex Mining

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

The idea behind Philippine Business Bank and Apex Mining Co 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.