Correlation Between One Gas and APA
Can any of the company-specific risk be diversified away by investing in both One 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 One Gas and APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One Gas and APA Group, you can compare the effects of market volatilities on One 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 One Gas with a short position of APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Gas and APA.
Diversification Opportunities for One Gas and APA
Excellent diversification
The 3 months correlation between One and APA is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding One Gas and APA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Group and One 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 One Gas 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 One Gas i.e., One Gas and APA go up and down completely randomly.
Pair Corralation between One Gas and APA
Considering the 90-day investment horizon One Gas is expected to generate 0.3 times more return on investment than APA. However, One Gas is 3.33 times less risky than APA. It trades about 0.16 of its potential returns per unit of risk. APA Group is currently generating about -0.01 per unit of risk. If you would invest 6,172 in One Gas on August 31, 2024 and sell it today you would earn a total of 1,625 from holding One Gas or generate 26.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.43% |
| Values | Daily Returns |
One Gas vs. APA Group
Performance |
| Timeline |
| One Gas |
| APA Group |
One Gas and APA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Gas and APA
The main advantage of trading using opposite One Gas and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One 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.| One Gas vs. Northwest Natural Gas | One Gas vs. Chesapeake Utilities | One Gas vs. NewJersey Resources | One Gas vs. RGC 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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