Correlation Between 02376LAA3 and 00108WAF7
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By analyzing existing cross correlation between AAL 395 11 JUL 30 and AEP TEX INC, you can compare the effects of market volatilities on 02376LAA3 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 02376LAA3 with a short position of 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of 02376LAA3 and 00108WAF7.
Diversification Opportunities for 02376LAA3 and 00108WAF7
Good diversification
The 3 months correlation between 02376LAA3 and 00108WAF7 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding AAL 395 11 JUL 30 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 02376LAA3 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 AAL 395 11 JUL 30 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 02376LAA3 i.e., 02376LAA3 and 00108WAF7 go up and down completely randomly.
Pair Corralation between 02376LAA3 and 00108WAF7
Assuming the 90 days trading horizon AAL 395 11 JUL 30 is expected to under-perform the 00108WAF7. But the bond apears to be less risky and, when comparing its historical volatility, AAL 395 11 JUL 30 is 42.36 times less risky than 00108WAF7. The bond trades about -0.11 of its potential returns per unit of risk. The AEP TEX INC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7,210 in AEP TEX INC on September 1, 2024 and sell it today you would lose (121.00) from holding AEP TEX INC or give up 1.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.56% |
| Values | Daily Returns |
AAL 395 11 JUL 30 vs. AEP TEX INC
Performance |
| Timeline |
| 02376LAA3 |
| AEP TEX INC |
02376LAA3 and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 02376LAA3 and 00108WAF7
The main advantage of trading using opposite 02376LAA3 and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 02376LAA3 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.| 02376LAA3 vs. Sun Country Airlines | 02376LAA3 vs. Triton International Limited | 02376LAA3 vs. TFI International | 02376LAA3 vs. Academy Sports Outdoors |
| 00108WAF7 vs. AKITA Drilling | 00108WAF7 vs. GameStop Corp | 00108WAF7 vs. Contagious Gaming | 00108WAF7 vs. Awilco Drilling PLC |
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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