Correlation Between APA and China Natural
Can any of the company-specific risk be diversified away by investing in both APA and China Natural 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 APA and China Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APA Group and China Natural Cmn, you can compare the effects of market volatilities on APA and China Natural 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 APA with a short position of China Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of APA and China Natural.
Diversification Opportunities for APA and China Natural
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between APA and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding APA Group and China Natural Cmn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Natural Cmn and APA 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 APA Group are associated (or correlated) with China Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Natural Cmn has no effect on the direction of APA i.e., APA and China Natural go up and down completely randomly.
Pair Corralation between APA and China Natural
If you would invest 400.00 in APA Group on November 1, 2024 and sell it today you would earn a total of 20.00 from holding APA Group or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
APA Group vs. China Natural Cmn
Performance |
| Timeline |
| APA Group |
| China Natural Cmn |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
APA and China Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APA and China Natural
The main advantage of trading using opposite APA and China Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APA position performs unexpectedly, China Natural 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 China Natural will offset losses from the drop in China Natural's long position.The idea behind APA Group and China Natural Cmn 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.| China Natural vs. ENN Energy Holdings | China Natural vs. APA Group | China Natural vs. EverGen Infrastructure Corp | China Natural vs. Beijing Gas Blue |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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