Correlation Between SilverBow Resources and APA
Can any of the company-specific risk be diversified away by investing in both SilverBow 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 SilverBow Resources and APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SilverBow Resources and APA Corporation, you can compare the effects of market volatilities on SilverBow 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 SilverBow Resources with a short position of APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SilverBow Resources and APA.
Diversification Opportunities for SilverBow Resources and APA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SilverBow and APA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SilverBow Resources and APA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Corporation and SilverBow 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 SilverBow 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 SilverBow Resources i.e., SilverBow Resources and APA go up and down completely randomly.
Pair Corralation between SilverBow Resources and APA
Given the investment horizon of 90 days SilverBow Resources is expected to under-perform the APA. In addition to that, SilverBow Resources is 4.25 times more volatile than APA Corporation. It trades about -0.06 of its total potential returns per unit of risk. APA Corporation is currently generating about -0.04 per unit of volatility. If you would invest 2,939 in APA Corporation on November 4, 2024 and sell it today you would lose (746.00) from holding APA Corporation or give up 25.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 48.58% |
| Values | Daily Returns |
SilverBow Resources vs. APA Corp.
Performance |
| Timeline |
| SilverBow Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| APA Corporation |
SilverBow Resources and APA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SilverBow Resources and APA
The main advantage of trading using opposite SilverBow Resources and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SilverBow 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.| SilverBow Resources vs. Vital Energy | SilverBow Resources vs. Permian Resources | SilverBow Resources vs. Magnolia Oil Gas | SilverBow Resources vs. Ring Energy |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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