Correlation Between 00108WAF7 and AMERICAN
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By analyzing existing cross correlation between AEP TEX INC and AMERICAN EXPRESS CR, you can compare the effects of market volatilities on 00108WAF7 and AMERICAN 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 AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and AMERICAN.
Diversification Opportunities for 00108WAF7 and AMERICAN
Significant diversification
The 3 months correlation between 00108WAF7 and AMERICAN is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and AMERICAN EXPRESS CR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN EXPRESS 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN EXPRESS has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and AMERICAN go up and down completely randomly.
Pair Corralation between 00108WAF7 and AMERICAN
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 171.18 times more return on investment than AMERICAN. However, 00108WAF7 is 171.18 times more volatile than AMERICAN EXPRESS CR. It trades about 0.07 of its potential returns per unit of risk. AMERICAN EXPRESS CR is currently generating about 0.01 per unit of risk. If you would invest 7,224 in AEP TEX INC on September 4, 2024 and sell it today you would earn a total of 997.00 from holding AEP TEX INC or generate 13.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 73.53% |
| Values | Daily Returns |
AEP TEX INC vs. AMERICAN EXPRESS CR
Performance |
| Timeline |
| AEP TEX INC |
| AMERICAN EXPRESS |
00108WAF7 and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and AMERICAN
The main advantage of trading using opposite 00108WAF7 and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's long position.| 00108WAF7 vs. Getty Realty | 00108WAF7 vs. Fortress Transp Infra | 00108WAF7 vs. Broadstone Net Lease | 00108WAF7 vs. Triton International Limited |
| AMERICAN vs. Paiute Oil Mining | AMERICAN vs. Western Asset Investment | AMERICAN vs. Corporacion America Airports | AMERICAN vs. Ryanair Holdings PLC |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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