Correlation Between Beijing Gas and APA
Can any of the company-specific risk be diversified away by investing in both Beijing Gas and APA 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 Beijing Gas and APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Gas Blue and APA Group, you can compare the effects of market volatilities on Beijing Gas and APA 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 Beijing Gas with a short position of APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Gas and APA.
Diversification Opportunities for Beijing Gas and APA
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beijing and APA is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Gas Blue and APA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Group and Beijing Gas 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 Beijing Gas Blue are associated (or correlated) with APA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APA Group has no effect on the direction of Beijing Gas i.e., Beijing Gas and APA go up and down completely randomly.
Pair Corralation between Beijing Gas and APA
Assuming the 90 days horizon Beijing Gas Blue is expected to under-perform the APA. In addition to that, Beijing Gas is 1.83 times more volatile than APA Group. It trades about -0.13 of its total potential returns per unit of risk. APA Group is currently generating about 0.0 per unit of volatility. If you would invest 450.00 in APA Group on November 8, 2024 and sell it today you would lose (50.00) from holding APA Group or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.44% |
| Values | Daily Returns |
Beijing Gas Blue vs. APA Group
Performance |
| Timeline |
| Beijing Gas Blue |
| APA Group |
Beijing Gas and APA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Gas and APA
The main advantage of trading using opposite Beijing Gas and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Gas position performs unexpectedly, APA 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 APA will offset losses from the drop in APA's long position.| Beijing Gas vs. ENN Energy Holdings | Beijing Gas vs. EverGen Infrastructure Corp | Beijing Gas vs. OPAL Fuels | Beijing Gas vs. Atmos Energy |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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