Correlation Between 00108WAF7 and 361448BJ1
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By analyzing existing cross correlation between AEP TEX INC and GMT 35 01 JUN 32, you can compare the effects of market volatilities on 00108WAF7 and 361448BJ1 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 361448BJ1. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and 361448BJ1.
Diversification Opportunities for 00108WAF7 and 361448BJ1
Good diversification
The 3 months correlation between 00108WAF7 and 361448BJ1 is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and GMT 35 01 JUN 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMT 35 01 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 361448BJ1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMT 35 01 has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and 361448BJ1 go up and down completely randomly.
Pair Corralation between 00108WAF7 and 361448BJ1
Assuming the 90 days trading horizon AEP TEX INC is expected to under-perform the 361448BJ1. In addition to that, 00108WAF7 is 1.68 times more volatile than GMT 35 01 JUN 32. It trades about -0.05 of its total potential returns per unit of risk. GMT 35 01 JUN 32 is currently generating about -0.05 per unit of volatility. If you would invest 8,920 in GMT 35 01 JUN 32 on August 31, 2024 and sell it today you would lose (217.00) from holding GMT 35 01 JUN 32 or give up 2.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEP TEX INC vs. GMT 35 01 JUN 32
Performance |
| Timeline |
| AEP TEX INC |
| GMT 35 01 |
00108WAF7 and 361448BJ1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and 361448BJ1
The main advantage of trading using opposite 00108WAF7 and 361448BJ1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, 361448BJ1 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 361448BJ1 will offset losses from the drop in 361448BJ1's long position.| 00108WAF7 vs. Asure Software | 00108WAF7 vs. Casio Computer Co | 00108WAF7 vs. Haverty Furniture Companies | 00108WAF7 vs. SL Green Realty |
| 361448BJ1 vs. ATT Inc | 361448BJ1 vs. Home Depot | 361448BJ1 vs. Cisco Systems | 361448BJ1 vs. Dupont De Nemours |
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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