Correlation Between CGX Energy and APA
Can any of the company-specific risk be diversified away by investing in both CGX Energy 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 CGX Energy and APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CGX Energy and APA Corporation, you can compare the effects of market volatilities on CGX Energy 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 CGX Energy with a short position of APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CGX Energy and APA.
Diversification Opportunities for CGX Energy and APA
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CGX and APA is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding CGX Energy and APA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Corporation and CGX Energy 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 CGX Energy 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 Corporation has no effect on the direction of CGX Energy i.e., CGX Energy and APA go up and down completely randomly.
Pair Corralation between CGX Energy and APA
Assuming the 90 days horizon CGX Energy is expected to under-perform the APA. In addition to that, CGX Energy is 2.5 times more volatile than APA Corporation. It trades about -0.03 of its total potential returns per unit of risk. APA Corporation is currently generating about -0.04 per unit of volatility. If you would invest 3,949 in APA Corporation on August 30, 2024 and sell it today you would lose (1,697) from holding APA Corporation or give up 42.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CGX Energy vs. APA Corp.
Performance |
| Timeline |
| CGX Energy |
| APA Corporation |
CGX Energy and APA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CGX Energy and APA
The main advantage of trading using opposite CGX Energy and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CGX Energy 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.| CGX Energy vs. Yamaha Motor Co | CGX Energy vs. Nitto Denko Corp | CGX Energy vs. Farmers Merchants Bancorp | CGX Energy vs. Furukawa Electric Co |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |