Correlation Between 00108WAF7 and LEGRAND
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By analyzing existing cross correlation between AEP TEX INC and LEGRAND S A, you can compare the effects of market volatilities on 00108WAF7 and LEGRAND 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 LEGRAND. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and LEGRAND.
Diversification Opportunities for 00108WAF7 and LEGRAND
Significant diversification
The 3 months correlation between 00108WAF7 and LEGRAND is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and LEGRAND S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEGRAND S A 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 LEGRAND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEGRAND S A has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and LEGRAND go up and down completely randomly.
Pair Corralation between 00108WAF7 and LEGRAND
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 12.26 times more return on investment than LEGRAND. However, 00108WAF7 is 12.26 times more volatile than LEGRAND S A. It trades about 0.11 of its potential returns per unit of risk. LEGRAND S A is currently generating about 0.19 per unit of risk. If you would invest 7,351 in AEP TEX INC on September 2, 2024 and sell it today you would earn a total of 317.00 from holding AEP TEX INC or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 82.35% |
| Values | Daily Returns |
AEP TEX INC vs. LEGRAND S A
Performance |
| Timeline |
| AEP TEX INC |
| LEGRAND S A |
00108WAF7 and LEGRAND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and LEGRAND
The main advantage of trading using opposite 00108WAF7 and LEGRAND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, LEGRAND 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 LEGRAND will offset losses from the drop in LEGRAND's long position.| 00108WAF7 vs. Zhihu Inc ADR | 00108WAF7 vs. Playtika Holding Corp | 00108WAF7 vs. Thor Industries | 00108WAF7 vs. Dana Inc |
| LEGRAND vs. AEP TEX INC | LEGRAND vs. US BANK NATIONAL | LEGRAND vs. Bank of America | LEGRAND vs. GE Aerospace |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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