Correlation Between 03740LAG7 and 00108WAF7
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By analyzing existing cross correlation between AON 535 28 FEB 33 and AEP TEX INC, you can compare the effects of market volatilities on 03740LAG7 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 03740LAG7 with a short position of 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of 03740LAG7 and 00108WAF7.
Diversification Opportunities for 03740LAG7 and 00108WAF7
Significant diversification
The 3 months correlation between 03740LAG7 and 00108WAF7 is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding AON 535 28 FEB 33 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 03740LAG7 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 AON 535 28 FEB 33 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 03740LAG7 i.e., 03740LAG7 and 00108WAF7 go up and down completely randomly.
Pair Corralation between 03740LAG7 and 00108WAF7
Assuming the 90 days trading horizon 03740LAG7 is expected to generate 5.35 times less return on investment than 00108WAF7. But when comparing it to its historical volatility, AON 535 28 FEB 33 is 7.83 times less risky than 00108WAF7. It trades about 0.18 of its potential returns per unit of risk. AEP TEX INC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 7,181 in AEP TEX INC on October 29, 2024 and sell it today you would earn a total of 487.00 from holding AEP TEX INC or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 75.0% |
| Values | Daily Returns |
AON 535 28 FEB 33 vs. AEP TEX INC
Performance |
| Timeline |
| AON 535 28 |
| AEP TEX INC |
03740LAG7 and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 03740LAG7 and 00108WAF7
The main advantage of trading using opposite 03740LAG7 and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 03740LAG7 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.| 03740LAG7 vs. AEP TEX INC | 03740LAG7 vs. US BANK NATIONAL | 03740LAG7 vs. Albertsons Companies | 03740LAG7 vs. Copart Inc |
| 00108WAF7 vs. Cannae Holdings | 00108WAF7 vs. Westrock Coffee | 00108WAF7 vs. First Watch Restaurant | 00108WAF7 vs. Bank of New |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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