Correlation Between ENN Energy and APA
Can any of the company-specific risk be diversified away by investing in both ENN 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 ENN Energy and APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENN Energy Holdings and APA Group, you can compare the effects of market volatilities on ENN 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 ENN Energy with a short position of APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENN Energy and APA.
Diversification Opportunities for ENN Energy and APA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ENN and APA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ENN Energy Holdings and APA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Group and ENN 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 ENN Energy Holdings 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 ENN Energy i.e., ENN Energy and APA go up and down completely randomly.
Pair Corralation between ENN Energy and APA
Assuming the 90 days horizon ENN Energy Holdings is expected to generate 1.07 times more return on investment than APA. However, ENN Energy is 1.07 times more volatile than APA Group. It trades about -0.08 of its potential returns per unit of risk. APA Group is currently generating about -0.13 per unit of risk. If you would invest 764.00 in ENN Energy Holdings on August 28, 2024 and sell it today you would lose (92.00) from holding ENN Energy Holdings or give up 12.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENN Energy Holdings vs. APA Group
Performance |
| Timeline |
| ENN Energy Holdings |
| APA Group |
ENN Energy and APA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENN Energy and APA
The main advantage of trading using opposite ENN Energy and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENN 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.| ENN Energy vs. Beijing Gas Blue | ENN Energy vs. EverGen Infrastructure Corp | ENN Energy vs. OPAL Fuels | ENN Energy vs. APA Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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