Correlation Between 00108WAF7 and AMERICAN
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By analyzing existing cross correlation between AEP TEX INC and AMERICAN HOMES 4, 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
Average diversification
The 3 months correlation between 00108WAF7 and AMERICAN is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and AMERICAN HOMES 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN HOMES 4 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 HOMES 4 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 under-perform the AMERICAN. In addition to that, 00108WAF7 is 6.79 times more volatile than AMERICAN HOMES 4. It trades about -0.04 of its total potential returns per unit of risk. AMERICAN HOMES 4 is currently generating about -0.13 per unit of volatility. If you would invest 9,946 in AMERICAN HOMES 4 on September 1, 2024 and sell it today you would lose (184.00) from holding AMERICAN HOMES 4 or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 70.0% |
| Values | Daily Returns |
AEP TEX INC vs. AMERICAN HOMES 4
Performance |
| Timeline |
| AEP TEX INC |
| AMERICAN HOMES 4 |
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. AKITA Drilling | 00108WAF7 vs. GameStop Corp | 00108WAF7 vs. Contagious Gaming | 00108WAF7 vs. Awilco Drilling PLC |
| AMERICAN vs. AEP TEX INC | AMERICAN vs. US BANK NATIONAL | AMERICAN vs. American Express | AMERICAN vs. Chevron Corp |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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