Correlation Between 00108WAF7 and 459200KV2
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By analyzing existing cross correlation between AEP TEX INC and IBM 49 27 JUL 52, you can compare the effects of market volatilities on 00108WAF7 and 459200KV2 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 459200KV2. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and 459200KV2.
Diversification Opportunities for 00108WAF7 and 459200KV2
Average diversification
The 3 months correlation between 00108WAF7 and 459200KV2 is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and IBM 49 27 JUL 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBM 49 27 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 459200KV2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBM 49 27 has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and 459200KV2 go up and down completely randomly.
Pair Corralation between 00108WAF7 and 459200KV2
Assuming the 90 days trading horizon AEP TEX INC is expected to under-perform the 459200KV2. In addition to that, 00108WAF7 is 2.22 times more volatile than IBM 49 27 JUL 52. It trades about -0.04 of its total potential returns per unit of risk. IBM 49 27 JUL 52 is currently generating about 0.1 per unit of volatility. If you would invest 9,161 in IBM 49 27 JUL 52 on August 29, 2024 and sell it today you would earn a total of 291.00 from holding IBM 49 27 JUL 52 or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.89% |
| Values | Daily Returns |
AEP TEX INC vs. IBM 49 27 JUL 52
Performance |
| Timeline |
| AEP TEX INC |
| IBM 49 27 |
00108WAF7 and 459200KV2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and 459200KV2
The main advantage of trading using opposite 00108WAF7 and 459200KV2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, 459200KV2 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 459200KV2 will offset losses from the drop in 459200KV2's long position.| 00108WAF7 vs. US BANK NATIONAL | 00108WAF7 vs. Dupont De Nemours | 00108WAF7 vs. The Travelers Companies | 00108WAF7 vs. Exxon Mobil Corp |
| 459200KV2 vs. AEP TEX INC | 459200KV2 vs. US BANK NATIONAL | 459200KV2 vs. 3M Company | 459200KV2 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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