Correlation Between Crescent Point and APA
Can any of the company-specific risk be diversified away by investing in both Crescent Point 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 Crescent Point and APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescent Point Energy and APA Corporation, you can compare the effects of market volatilities on Crescent Point 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 Crescent Point with a short position of APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Point and APA.
Diversification Opportunities for Crescent Point and APA
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crescent and APA is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Point Energy and APA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Corporation and Crescent Point 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 Crescent Point 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 Crescent Point i.e., Crescent Point and APA go up and down completely randomly.
Pair Corralation between Crescent Point and APA
If you would invest 2,187 in APA Corporation on September 13, 2024 and sell it today you would earn a total of 77.50 from holding APA Corporation or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Crescent Point Energy vs. APA Corp.
Performance |
| Timeline |
| Crescent Point Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| APA Corporation |
Crescent Point and APA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Point and APA
The main advantage of trading using opposite Crescent Point and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Point 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.| Crescent Point vs. Vermilion Energy | Crescent Point vs. Canadian Natural Resources | Crescent Point vs. Baytex Energy Corp | Crescent Point vs. Ovintiv |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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