Correlation Between AETNA and Gap,
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By analyzing existing cross correlation between AETNA INC NEW and The Gap,, you can compare the effects of market volatilities on AETNA and Gap, 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 AETNA with a short position of Gap,. Check out your portfolio center. Please also check ongoing floating volatility patterns of AETNA and Gap,.
Diversification Opportunities for AETNA and Gap,
Very good diversification
The 3 months correlation between AETNA and Gap, is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding AETNA INC NEW and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and AETNA 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 AETNA INC NEW are associated (or correlated) with Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of AETNA i.e., AETNA and Gap, go up and down completely randomly.
Pair Corralation between AETNA and Gap,
Assuming the 90 days trading horizon AETNA INC NEW is expected to under-perform the Gap,. But the bond apears to be less risky and, when comparing its historical volatility, AETNA INC NEW is 11.68 times less risky than Gap,. The bond trades about -0.25 of its potential returns per unit of risk. The The Gap, is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,146 in The Gap, on August 31, 2024 and sell it today you would earn a total of 276.00 from holding The Gap, or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 45.45% |
| Values | Daily Returns |
AETNA INC NEW vs. The Gap,
Performance |
| Timeline |
| AETNA INC NEW |
| Gap, |
AETNA and Gap, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AETNA and Gap,
The main advantage of trading using opposite AETNA and Gap, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AETNA position performs unexpectedly, Gap, 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 Gap, will offset losses from the drop in Gap,'s long position.The idea behind AETNA INC NEW and The Gap, 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.| Gap, vs. SEI Investments | Gap, vs. Corporacion America Airports | Gap, vs. Nasdaq Inc | Gap, vs. Sabra Healthcare REIT |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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