Correlation Between SOCKET MOBILE and APA

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Can any of the company-specific risk be diversified away by investing in both SOCKET MOBILE 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 SOCKET MOBILE and APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOCKET MOBILE NEW and APA Group, you can compare the effects of market volatilities on SOCKET MOBILE 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 SOCKET MOBILE with a short position of APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOCKET MOBILE and APA.

Diversification Opportunities for SOCKET MOBILE and APA

SOCKETAPADiversified AwaySOCKETAPADiversified Away100%
0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between SOCKET and APA is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SOCKET MOBILE NEW and APA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Group and SOCKET MOBILE 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 SOCKET MOBILE NEW 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 SOCKET MOBILE i.e., SOCKET MOBILE and APA go up and down completely randomly.

Pair Corralation between SOCKET MOBILE and APA

Assuming the 90 days trading horizon SOCKET MOBILE NEW is expected to under-perform the APA. In addition to that, SOCKET MOBILE is 2.44 times more volatile than APA Group. It trades about -0.28 of its total potential returns per unit of risk. APA Group is currently generating about -0.18 per unit of volatility. If you would invest  407.00  in APA Group on November 22, 2024 and sell it today you would lose (16.00) from holding APA Group or give up 3.93% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

SOCKET MOBILE NEW  vs.  APA Group

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 10203040
JavaScript chart by amCharts 3.21.15SNB1 PJZ
       Timeline  
SOCKET MOBILE NEW 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days SOCKET MOBILE NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental drivers remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.251.31.351.41.451.5
APA Group 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days APA Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, APA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3.83.944.14.24.3

SOCKET MOBILE and APA Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-12.08-9.05-6.02-2.980.03.026.159.2712.415.52 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15SNB1 PJZ
       Returns  

Pair Trading with SOCKET MOBILE and APA

The main advantage of trading using opposite SOCKET MOBILE and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOCKET MOBILE 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 SOCKET MOBILE NEW and APA Group 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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