Correlation Between 00108WAF7 and 126408HL0
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By analyzing existing cross correlation between AEP TEX INC and CSX P 465, you can compare the effects of market volatilities on 00108WAF7 and 126408HL0 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 126408HL0. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and 126408HL0.
Diversification Opportunities for 00108WAF7 and 126408HL0
Good diversification
The 3 months correlation between 00108WAF7 and 126408HL0 is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and CSX P 465 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX P 465 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 126408HL0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX P 465 has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and 126408HL0 go up and down completely randomly.
Pair Corralation between 00108WAF7 and 126408HL0
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 54.85 times more return on investment than 126408HL0. However, 00108WAF7 is 54.85 times more volatile than CSX P 465. It trades about 0.07 of its potential returns per unit of risk. CSX P 465 is currently generating about -0.01 per unit of risk. If you would invest 7,224 in AEP TEX INC on September 3, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEP TEX INC vs. CSX P 465
Performance |
| Timeline |
| AEP TEX INC |
| CSX P 465 |
00108WAF7 and 126408HL0 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and 126408HL0
The main advantage of trading using opposite 00108WAF7 and 126408HL0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, 126408HL0 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 126408HL0 will offset losses from the drop in 126408HL0's long position.| 00108WAF7 vs. Universal Music Group | 00108WAF7 vs. Pool Corporation | 00108WAF7 vs. Under Armour C | 00108WAF7 vs. Figs Inc |
| 126408HL0 vs. The Travelers Companies | 126408HL0 vs. GE Aerospace | 126408HL0 vs. Walmart | 126408HL0 vs. Pfizer Inc |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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