Correlation Between EON Resources and APA
Can any of the company-specific risk be diversified away by investing in both EON Resources 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 EON Resources and APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EON Resources and APA Corporation, you can compare the effects of market volatilities on EON Resources 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 EON Resources with a short position of APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EON Resources and APA.
Diversification Opportunities for EON Resources and APA
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EON and APA is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding EON Resources and APA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Corporation and EON Resources 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 EON Resources 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 EON Resources i.e., EON Resources and APA go up and down completely randomly.
Pair Corralation between EON Resources and APA
Given the investment horizon of 90 days EON Resources is expected to generate 4.54 times more return on investment than APA. However, EON Resources is 4.54 times more volatile than APA Corporation. It trades about 0.0 of its potential returns per unit of risk. APA Corporation is currently generating about -0.04 per unit of risk. If you would invest 1,012 in EON Resources on August 27, 2024 and sell it today you would lose (910.00) from holding EON Resources or give up 89.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EON Resources vs. APA Corp.
Performance |
| Timeline |
| EON Resources |
| APA Corporation |
EON Resources and APA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EON Resources and APA
The main advantage of trading using opposite EON Resources and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EON Resources 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.| EON Resources vs. Devon Energy | EON Resources vs. ConocoPhillips | EON Resources vs. Occidental Petroleum | EON Resources vs. Permian Resources |
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 CEOs Directory module to screen CEOs from public companies around the world.
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