Correlation Between 00108WAF7 and 872540AQ2
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By analyzing existing cross correlation between AEP TEX INC and TJX INC NEW, you can compare the effects of market volatilities on 00108WAF7 and 872540AQ2 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 872540AQ2. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and 872540AQ2.
Diversification Opportunities for 00108WAF7 and 872540AQ2
Good diversification
The 3 months correlation between 00108WAF7 and 872540AQ2 is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and TJX INC NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJX INC NEW 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 872540AQ2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJX INC NEW has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and 872540AQ2 go up and down completely randomly.
Pair Corralation between 00108WAF7 and 872540AQ2
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 5.02 times more return on investment than 872540AQ2. However, 00108WAF7 is 5.02 times more volatile than TJX INC NEW. It trades about 0.12 of its potential returns per unit of risk. TJX INC NEW is currently generating about -0.25 per unit of risk. If you would invest 7,181 in AEP TEX INC on November 1, 2024 and sell it today you would earn a total of 487.00 from holding AEP TEX INC or generate 6.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 80.95% |
Values | Daily Returns |
AEP TEX INC vs. TJX INC NEW
Performance |
Timeline |
AEP TEX INC |
TJX INC NEW |
00108WAF7 and 872540AQ2 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 00108WAF7 and 872540AQ2
The main advantage of trading using opposite 00108WAF7 and 872540AQ2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, 872540AQ2 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 872540AQ2 will offset losses from the drop in 872540AQ2's long position.00108WAF7 vs. US Global Investors | 00108WAF7 vs. Xiabuxiabu Catering Management | 00108WAF7 vs. Ameriprise Financial | 00108WAF7 vs. Apogee Therapeutics, Common |
872540AQ2 vs. Franklin Street Properties | 872540AQ2 vs. Juniata Valley Financial | 872540AQ2 vs. Aldel Financial II | 872540AQ2 vs. Summit Bank Group |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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