Correlation Between Japan Petroleum and APA
Can any of the company-specific risk be diversified away by investing in both Japan Petroleum 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 Japan Petroleum and APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Petroleum Exploration and APA Corporation, you can compare the effects of market volatilities on Japan Petroleum 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 Japan Petroleum with a short position of APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Petroleum and APA.
Diversification Opportunities for Japan Petroleum and APA
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Japan and APA is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Japan Petroleum Exploration and APA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Corporation and Japan Petroleum 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 Japan Petroleum Exploration 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 Japan Petroleum i.e., Japan Petroleum and APA go up and down completely randomly.
Pair Corralation between Japan Petroleum and APA
If you would invest 3,044 in Japan Petroleum Exploration on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Japan Petroleum Exploration or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Japan Petroleum Exploration vs. APA Corp.
Performance |
| Timeline |
| Japan Petroleum Expl |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| APA Corporation |
Japan Petroleum and APA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Petroleum and APA
The main advantage of trading using opposite Japan Petroleum and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Petroleum 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.| Japan Petroleum vs. PetroShale | Japan Petroleum vs. Inpex Corp ADR | Japan Petroleum vs. Canacol Energy | Japan Petroleum vs. Battalion Oil Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |