Correlation Between 00108WAF7 and 459200KN0
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By analyzing existing cross correlation between AEP TEX INC and IBM 272 09 FEB 32, you can compare the effects of market volatilities on 00108WAF7 and 459200KN0 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 459200KN0. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and 459200KN0.
Diversification Opportunities for 00108WAF7 and 459200KN0
Good diversification
The 3 months correlation between 00108WAF7 and 459200KN0 is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and IBM 272 09 FEB 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBM 272 09 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 459200KN0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBM 272 09 has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and 459200KN0 go up and down completely randomly.
Pair Corralation between 00108WAF7 and 459200KN0
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 125.59 times more return on investment than 459200KN0. However, 00108WAF7 is 125.59 times more volatile than IBM 272 09 FEB 32. It trades about 0.14 of its potential returns per unit of risk. IBM 272 09 FEB 32 is currently generating about 0.0 per unit of risk. If you would invest 7,175 in AEP TEX INC on August 29, 2024 and sell it today you would lose (86.00) from holding AEP TEX INC or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 51.21% |
| Values | Daily Returns |
AEP TEX INC vs. IBM 272 09 FEB 32
Performance |
| Timeline |
| AEP TEX INC |
| IBM 272 09 |
00108WAF7 and 459200KN0 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and 459200KN0
The main advantage of trading using opposite 00108WAF7 and 459200KN0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, 459200KN0 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 459200KN0 will offset losses from the drop in 459200KN0's long position.| 00108WAF7 vs. US BANK NATIONAL | 00108WAF7 vs. Dupont De Nemours | 00108WAF7 vs. The Travelers Companies | 00108WAF7 vs. Exxon Mobil Corp |
| 459200KN0 vs. AEP TEX INC | 459200KN0 vs. US BANK NATIONAL | 459200KN0 vs. 3M Company | 459200KN0 vs. Alcoa 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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