Correlation Between 00108WAF7 and TRANSCANADA
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By analyzing existing cross correlation between AEP TEX INC and TRANSCANADA PIPELINES LTD, you can compare the effects of market volatilities on 00108WAF7 and TRANSCANADA 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 TRANSCANADA. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and TRANSCANADA.
Diversification Opportunities for 00108WAF7 and TRANSCANADA
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 00108WAF7 and TRANSCANADA is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and TRANSCANADA PIPELINES LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSCANADA PIPELINES LTD 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 TRANSCANADA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSCANADA PIPELINES LTD has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and TRANSCANADA go up and down completely randomly.
Pair Corralation between 00108WAF7 and TRANSCANADA
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 0.93 times more return on investment than TRANSCANADA. However, AEP TEX INC is 1.07 times less risky than TRANSCANADA. It trades about 0.0 of its potential returns per unit of risk. TRANSCANADA PIPELINES LTD is currently generating about -0.03 per unit of risk. If you would invest 7,539 in AEP TEX INC on November 28, 2024 and sell it today you would earn a total of 0.00 from holding AEP TEX INC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.85% |
| Values | Daily Returns |
AEP TEX INC vs. TRANSCANADA PIPELINES LTD
Performance |
| Timeline |
| AEP TEX INC |
| TRANSCANADA PIPELINES LTD |
00108WAF7 and TRANSCANADA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and TRANSCANADA
The main advantage of trading using opposite 00108WAF7 and TRANSCANADA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, TRANSCANADA 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 TRANSCANADA will offset losses from the drop in TRANSCANADA's long position.| 00108WAF7 vs. Uber Technologies | 00108WAF7 vs. Arrow Electronics | 00108WAF7 vs. ServiceNow | 00108WAF7 vs. STMicroelectronics NV ADR |
| TRANSCANADA vs. Analog Devices | TRANSCANADA vs. Allient | TRANSCANADA vs. Alto Neuroscience, | TRANSCANADA vs. FARO Technologies |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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