Correlation Between Ovintiv and APA
Can any of the company-specific risk be diversified away by investing in both Ovintiv 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 Ovintiv and APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ovintiv and APA Corporation, you can compare the effects of market volatilities on Ovintiv 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 Ovintiv with a short position of APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ovintiv and APA.
Diversification Opportunities for Ovintiv and APA
Very good diversification
The 3 months correlation between Ovintiv and APA is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ovintiv and APA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Corporation and Ovintiv 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 Ovintiv 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 Ovintiv i.e., Ovintiv and APA go up and down completely randomly.
Pair Corralation between Ovintiv and APA
Considering the 90-day investment horizon Ovintiv is expected to under-perform the APA. In addition to that, Ovintiv is 1.51 times more volatile than APA Corporation. It trades about -0.01 of its total potential returns per unit of risk. APA Corporation is currently generating about 0.11 per unit of volatility. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ovintiv vs. APA Corp.
Performance |
| Timeline |
| Ovintiv |
| APA Corporation |
Ovintiv and APA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ovintiv and APA
The main advantage of trading using opposite Ovintiv and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ovintiv 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.| Ovintiv vs. Evolution Petroleum | Ovintiv vs. Ring Energy | Ovintiv vs. Gran Tierra Energy | Ovintiv 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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