Correlation Between 00108WAF7 and Travelers Companies
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By analyzing existing cross correlation between AEP TEX INC and The Travelers Companies, you can compare the effects of market volatilities on 00108WAF7 and Travelers Companies 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 Travelers Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and Travelers Companies.
Diversification Opportunities for 00108WAF7 and Travelers Companies
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 00108WAF7 and Travelers is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and The Travelers Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Travelers Companies 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 Travelers Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Travelers Companies has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and Travelers Companies go up and down completely randomly.
Pair Corralation between 00108WAF7 and Travelers Companies
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 2.68 times more return on investment than Travelers Companies. However, 00108WAF7 is 2.68 times more volatile than The Travelers Companies. It trades about 0.23 of its potential returns per unit of risk. The Travelers Companies is currently generating about 0.13 per unit of risk. If you would invest 7,420 in AEP TEX INC on August 28, 2024 and sell it today you would earn a total of 801.00 from holding AEP TEX INC or generate 10.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 63.64% |
| Values | Daily Returns |
AEP TEX INC vs. The Travelers Companies
Performance |
| Timeline |
| AEP TEX INC |
| The Travelers Companies |
00108WAF7 and Travelers Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and Travelers Companies
The main advantage of trading using opposite 00108WAF7 and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, Travelers Companies 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 Travelers Companies will offset losses from the drop in Travelers Companies' long position.| 00108WAF7 vs. US BANK NATIONAL | 00108WAF7 vs. Dupont De Nemours | 00108WAF7 vs. The Travelers Companies | 00108WAF7 vs. Exxon Mobil Corp |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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