Correlation Between 00108WAF7 and Energy
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By analyzing existing cross correlation between AEP TEX INC and Energy and Water, you can compare the effects of market volatilities on 00108WAF7 and Energy 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 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and Energy.
Diversification Opportunities for 00108WAF7 and Energy
Good diversification
The 3 months correlation between 00108WAF7 and Energy is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and Energy and Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy and Water 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 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy and Water has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and Energy go up and down completely randomly.
Pair Corralation between 00108WAF7 and Energy
Assuming the 90 days trading horizon 00108WAF7 is expected to generate 2.95 times less return on investment than Energy. But when comparing it to its historical volatility, AEP TEX INC is 4.97 times less risky than Energy. It trades about 0.26 of its potential returns per unit of risk. Energy and Water is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.35 in Energy and Water on October 20, 2024 and sell it today you would earn a total of 0.10 from holding Energy and Water or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.0% |
| Values | Daily Returns |
AEP TEX INC vs. Energy and Water
Performance |
| Timeline |
| AEP TEX INC |
| Energy and Water |
00108WAF7 and Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and Energy
The main advantage of trading using opposite 00108WAF7 and Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, Energy 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 Energy will offset losses from the drop in Energy's long position.| 00108WAF7 vs. Delta Air Lines | 00108WAF7 vs. Air Lease | 00108WAF7 vs. Regeneron Pharmaceuticals | 00108WAF7 vs. Mesa Air Group |
| Energy vs. Vow ASA | Energy vs. Eestech | Energy vs. One World Universe | Energy vs. Bion Environmental Technologies |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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