Correlation Between 00108WAF7 and 05526DBF1
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By analyzing existing cross correlation between AEP TEX INC and B A T, you can compare the effects of market volatilities on 00108WAF7 and 05526DBF1 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 05526DBF1. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and 05526DBF1.
Diversification Opportunities for 00108WAF7 and 05526DBF1
Very weak diversification
The 3 months correlation between 00108WAF7 and 05526DBF1 is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and B A T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 05526DBF1 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 05526DBF1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 05526DBF1 has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and 05526DBF1 go up and down completely randomly.
Pair Corralation between 00108WAF7 and 05526DBF1
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 0.92 times more return on investment than 05526DBF1. However, AEP TEX INC is 1.09 times less risky than 05526DBF1. It trades about 0.2 of its potential returns per unit of risk. B A T is currently generating about -0.09 per unit of risk. If you would invest 7,289 in AEP TEX INC on November 28, 2024 and sell it today you would earn a total of 250.00 from holding AEP TEX INC or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
AEP TEX INC vs. B A T
Performance |
| Timeline |
| AEP TEX INC |
| 05526DBF1 |
00108WAF7 and 05526DBF1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and 05526DBF1
The main advantage of trading using opposite 00108WAF7 and 05526DBF1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, 05526DBF1 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 05526DBF1 will offset losses from the drop in 05526DBF1's long position.| 00108WAF7 vs. Emerson Radio | 00108WAF7 vs. Acumen Pharmaceuticals | 00108WAF7 vs. Spyre Therapeutics | 00108WAF7 vs. Thor Industries |
| 05526DBF1 vs. Eldorado Gold Corp | 05526DBF1 vs. Two Harbors Investments | 05526DBF1 vs. AG Mortgage Investment | 05526DBF1 vs. Axcelis 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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