Correlation Between 00108WAF7 and STCITY
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By analyzing existing cross correlation between AEP TEX INC and STCITY 65 15 JAN 28, you can compare the effects of market volatilities on 00108WAF7 and STCITY 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 STCITY. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and STCITY.
Diversification Opportunities for 00108WAF7 and STCITY
Good diversification
The 3 months correlation between 00108WAF7 and STCITY is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and STCITY 65 15 JAN 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STCITY 65 15 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 STCITY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STCITY 65 15 has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and STCITY go up and down completely randomly.
Pair Corralation between 00108WAF7 and STCITY
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 0.94 times more return on investment than STCITY. However, AEP TEX INC is 1.06 times less risky than STCITY. It trades about 0.09 of its potential returns per unit of risk. STCITY 65 15 JAN 28 is currently generating about -0.37 per unit of risk. If you would invest 7,424 in AEP TEX INC on September 12, 2024 and sell it today you would earn a total of 244.00 from holding AEP TEX INC or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.57% |
| Values | Daily Returns |
AEP TEX INC vs. STCITY 65 15 JAN 28
Performance |
| Timeline |
| AEP TEX INC |
| STCITY 65 15 |
00108WAF7 and STCITY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and STCITY
The main advantage of trading using opposite 00108WAF7 and STCITY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, STCITY 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 STCITY will offset losses from the drop in STCITY's long position.The idea behind AEP TEX INC and STCITY 65 15 JAN 28 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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