Correlation Between Savoy Energy and APA

Can any of the company-specific risk be diversified away by investing in both Savoy 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 Savoy Energy and APA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Savoy Energy Corp and APA Corporation, you can compare the effects of market volatilities on Savoy 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 Savoy Energy with a short position of APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Savoy Energy and APA.

Diversification Opportunities for Savoy Energy and APA

0.0

Correlation Coefficient

Savoy Energy  APA

Pay attention - limited upside

The 3 months correlation between Savoy and APA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Savoy 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 Savoy 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 Savoy 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 Savoy Energy i.e., Savoy Energy and APA go up and down completely randomly.

Pair Corralation between Savoy Energy and APA

If you would invest  3,074  in APA Corporation on February 19, 2024 and sell it today you would earn a total of  14.00  from holding APA Corporation or generate 0.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Savoy Energy Corp  vs.  APA Corp.

Savoy Energy Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Savoy Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Savoy Energy is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

APA Corporation

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in APA Corporation are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, APA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Savoy Energy and APA

The main advantage of trading using opposite Savoy Energy and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Savoy 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.

The idea behind Savoy Energy Corp and APA Corporation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Transaction History module to view history of all your transactions and understand their impact on performance.