Correlation Between 020002AJ0 and 00108WAF7
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By analyzing existing cross correlation between ALL 69 15 MAY 38 and AEP TEX INC, you can compare the effects of market volatilities on 020002AJ0 and 00108WAF7 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 020002AJ0 with a short position of 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of 020002AJ0 and 00108WAF7.
Diversification Opportunities for 020002AJ0 and 00108WAF7
Good diversification
The 3 months correlation between 020002AJ0 and 00108WAF7 is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ALL 69 15 MAY 38 and AEP TEX INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEP TEX INC and 020002AJ0 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 ALL 69 15 MAY 38 are associated (or correlated) with 00108WAF7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEP TEX INC has no effect on the direction of 020002AJ0 i.e., 020002AJ0 and 00108WAF7 go up and down completely randomly.
Pair Corralation between 020002AJ0 and 00108WAF7
Assuming the 90 days trading horizon ALL 69 15 MAY 38 is expected to under-perform the 00108WAF7. But the bond apears to be less risky and, when comparing its historical volatility, ALL 69 15 MAY 38 is 54.72 times less risky than 00108WAF7. The bond trades about -0.03 of its potential returns per unit of risk. The AEP TEX INC is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 7,507 in AEP TEX INC on September 12, 2024 and sell it today you would earn a total of 161.00 from holding AEP TEX INC or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 47.83% |
| Values | Daily Returns |
ALL 69 15 MAY 38 vs. AEP TEX INC
Performance |
| Timeline |
| ALL 69 15 |
| AEP TEX INC |
020002AJ0 and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 020002AJ0 and 00108WAF7
The main advantage of trading using opposite 020002AJ0 and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 020002AJ0 position performs unexpectedly, 00108WAF7 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 00108WAF7 will offset losses from the drop in 00108WAF7's long position.| 020002AJ0 vs. AEP TEX INC | 020002AJ0 vs. US BANK NATIONAL | 020002AJ0 vs. Alphabet Inc Class C | 020002AJ0 vs. InMode |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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