Correlation Between Mangels Industrial and APA

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

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

Diversification Opportunities for Mangels Industrial and APA

0.44

Correlation Coefficient

Mangels Industrial  APA

Very weak diversification

The 3 months correlation between Mangels and APA is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mangels Industrial SA and APA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Corporation and Mangels Industrial 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 Mangels Industrial SA 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 Mangels Industrial i.e., Mangels Industrial and APA go up and down completely randomly.

Pair Corralation between Mangels Industrial and APA

Assuming the 90 days trading horizon Mangels Industrial SA is expected to under-perform the APA. In addition to that, Mangels Industrial is 1.79 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 0.05 per unit of volatility. If you would invest  14,084  in APA Corporation on October 26, 2024 and sell it today you would earn a total of  891.00  from holding APA Corporation or generate 6.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.83%
Values	Daily Returns

Mangels Industrial SA  vs.  APA Corp.

Mangels Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mangels Industrial SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mangels Industrial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

APA Corporation

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in APA Corporation are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, APA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Mangels Industrial and APA

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

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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 CEOs Directory module to screen CEOs from public companies around the world.