Correlation Between 00108WAF7 and 103304BV2
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By analyzing existing cross correlation between AEP TEX INC and US103304BV23, you can compare the effects of market volatilities on 00108WAF7 and 103304BV2 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 00108WAF7 with a short position of 103304BV2. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and 103304BV2.
Diversification Opportunities for 00108WAF7 and 103304BV2
Good diversification
The 3 months correlation between 00108WAF7 and 103304BV2 is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and US103304BV23 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US103304BV23 and 00108WAF7 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 AEP TEX INC are associated (or correlated) with 103304BV2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US103304BV23 has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and 103304BV2 go up and down completely randomly.
Pair Corralation between 00108WAF7 and 103304BV2
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 4.28 times more return on investment than 103304BV2. However, 00108WAF7 is 4.28 times more volatile than US103304BV23. It trades about 0.1 of its potential returns per unit of risk. US103304BV23 is currently generating about -0.19 per unit of risk. If you would invest 7,113 in AEP TEX INC on February 21, 2024 and sell it today you would earn a total of 389.00 from holding AEP TEX INC or generate 5.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 63.64% |
Values | Daily Returns |
AEP TEX INC vs. US103304BV23
Performance |
Timeline |
AEP TEX INC |
US103304BV23 |
00108WAF7 and 103304BV2 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 00108WAF7 and 103304BV2
The main advantage of trading using opposite 00108WAF7 and 103304BV2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, 103304BV2 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 103304BV2 will offset losses from the drop in 103304BV2's long position.00108WAF7 vs. US BANK NATIONAL | 00108WAF7 vs. Bank of America | 00108WAF7 vs. Descartes Systems Group | 00108WAF7 vs. GCT Semiconductor Holding |
103304BV2 vs. Home Depot | 103304BV2 vs. Cisco Systems | 103304BV2 vs. 3M Company | 103304BV2 vs. Verizon Communications |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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