Correlation Between Strattner Financial and AAP
Can any of the company-specific risk be diversified away by investing in both Strattner Financial and AAP 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 Strattner Financial and AAP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strattner Financial Group and AAP Inc, you can compare the effects of market volatilities on Strattner Financial and AAP 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 Strattner Financial with a short position of AAP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strattner Financial and AAP.
Diversification Opportunities for Strattner Financial and AAP
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Strattner and AAP is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Strattner Financial Group and AAP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAP Inc and Strattner Financial 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 Strattner Financial Group are associated (or correlated) with AAP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAP Inc has no effect on the direction of Strattner Financial i.e., Strattner Financial and AAP go up and down completely randomly.
Pair Corralation between Strattner Financial and AAP
If you would invest 0.02 in AAP Inc on September 2, 2024 and sell it today you would earn a total of 0.00 from holding AAP Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strattner Financial Group vs. AAP Inc
Performance |
| Timeline |
| Strattner Financial |
| AAP Inc |
Strattner Financial and AAP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strattner Financial and AAP
The main advantage of trading using opposite Strattner Financial and AAP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strattner Financial position performs unexpectedly, AAP 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 AAP will offset losses from the drop in AAP's long position.| Strattner Financial vs. Petroleo Brasileiro Petrobras | Strattner Financial vs. Equinor ASA ADR | Strattner Financial vs. Eni SpA ADR | Strattner Financial vs. YPF Sociedad Anonima |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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