Correlation Between XXL Energy and APA
Can any of the company-specific risk be diversified away by investing in both XXL Energy 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 XXL Energy and APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XXL Energy Corp and APA Corporation, you can compare the effects of market volatilities on XXL Energy 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 XXL Energy with a short position of APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of XXL Energy and APA.
Diversification Opportunities for XXL Energy and APA
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XXL and APA is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding XXL Energy Corp and APA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Corporation and XXL Energy 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 XXL Energy Corp 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 XXL Energy i.e., XXL Energy and APA go up and down completely randomly.
Pair Corralation between XXL Energy and APA
If you would invest 0.16 in XXL Energy Corp on September 2, 2024 and sell it today you would earn a total of 0.00 from holding XXL Energy Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
XXL Energy Corp vs. APA Corp.
Performance |
| Timeline |
| XXL Energy Corp |
| APA Corporation |
XXL Energy and APA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XXL Energy and APA
The main advantage of trading using opposite XXL Energy and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XXL Energy 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.| XXL Energy vs. Petroleo Brasileiro Petrobras | XXL Energy vs. Equinor ASA ADR | XXL Energy vs. Eni SpA ADR | XXL Energy vs. YPF Sociedad Anonima |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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