Correlation Between AMERICAN and 00108WAF7
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By analyzing existing cross correlation between AMERICAN EXPRESS PANY and AEP TEX INC, you can compare the effects of market volatilities on AMERICAN 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 AMERICAN with a short position of 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMERICAN and 00108WAF7.
Diversification Opportunities for AMERICAN and 00108WAF7
Significant diversification
The 3 months correlation between AMERICAN and 00108WAF7 is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding AMERICAN EXPRESS PANY 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 AMERICAN 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 AMERICAN EXPRESS PANY 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 AMERICAN i.e., AMERICAN and 00108WAF7 go up and down completely randomly.
Pair Corralation between AMERICAN and 00108WAF7
Assuming the 90 days trading horizon AMERICAN is expected to generate 3856.09 times less return on investment than 00108WAF7. But when comparing it to its historical volatility, AMERICAN EXPRESS PANY is 409.32 times less risky than 00108WAF7. It trades about 0.01 of its potential returns per unit of risk. AEP TEX INC is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 7,450 in AEP TEX INC on September 13, 2024 and sell it today you would earn a total of 218.00 from holding AEP TEX INC or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 63.54% |
| Values | Daily Returns |
AMERICAN EXPRESS PANY vs. AEP TEX INC
Performance |
| Timeline |
| AMERICAN EXPRESS PANY |
| AEP TEX INC |
AMERICAN and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMERICAN and 00108WAF7
The main advantage of trading using opposite AMERICAN and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMERICAN 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.| AMERICAN vs. Molson Coors Brewing | AMERICAN vs. Celsius Holdings | AMERICAN vs. Tencent Music Entertainment | AMERICAN vs. Datadog |
| 00108WAF7 vs. Dream Finders Homes | 00108WAF7 vs. ReTo Eco Solutions | 00108WAF7 vs. Magna International | 00108WAF7 vs. Tyson Foods |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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