Correlation Between 00108WAF7 and 3M
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By analyzing existing cross correlation between AEP TEX INC and 3M Company, you can compare the effects of market volatilities on 00108WAF7 and 3M 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 3M. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and 3M.
Diversification Opportunities for 00108WAF7 and 3M
Very good diversification
The 3 months correlation between 00108WAF7 and 3M is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and 3M Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3M Company 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 3M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3M Company has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and 3M go up and down completely randomly.
Pair Corralation between 00108WAF7 and 3M
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 2.38 times more return on investment than 3M. However, 00108WAF7 is 2.38 times more volatile than 3M Company. It trades about 0.27 of its potential returns per unit of risk. 3M Company is currently generating about 0.55 per unit of risk. If you would invest 7,193 in AEP TEX INC on November 3, 2024 and sell it today you would earn a total of 1,028 from holding AEP TEX INC or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
AEP TEX INC vs. 3M Company
Performance |
| Timeline |
| AEP TEX INC |
| 3M Company |
00108WAF7 and 3M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and 3M
The main advantage of trading using opposite 00108WAF7 and 3M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, 3M 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 3M will offset losses from the drop in 3M's long position.| 00108WAF7 vs. DHI Group | 00108WAF7 vs. United Natural Foods | 00108WAF7 vs. Lianhua Supermarket Holdings | 00108WAF7 vs. Q2 Holdings |
| 3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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