Correlation Between CREDIT and 00108WAF7
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By analyzing existing cross correlation between CREDIT ACCEP P and AEP TEX INC, you can compare the effects of market volatilities on CREDIT 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 CREDIT with a short position of 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREDIT and 00108WAF7.
Diversification Opportunities for CREDIT and 00108WAF7
Good diversification
The 3 months correlation between CREDIT and 00108WAF7 is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CREDIT ACCEP P 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 CREDIT 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 CREDIT ACCEP P 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 CREDIT i.e., CREDIT and 00108WAF7 go up and down completely randomly.
Pair Corralation between CREDIT and 00108WAF7
Assuming the 90 days trading horizon CREDIT is expected to generate 10.27 times less return on investment than 00108WAF7. In addition to that, CREDIT is 2.16 times more volatile than AEP TEX INC. It trades about 0.01 of its total potential returns per unit of risk. AEP TEX INC is currently generating about 0.2 per unit of volatility. If you would invest 7,289 in AEP TEX INC on November 28, 2024 and sell it today you would earn a total of 250.00 from holding AEP TEX INC or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
CREDIT ACCEP P vs. AEP TEX INC
Performance |
| Timeline |
| CREDIT ACCEP P |
| AEP TEX INC |
CREDIT and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREDIT and 00108WAF7
The main advantage of trading using opposite CREDIT and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREDIT 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.The idea behind CREDIT ACCEP P and AEP TEX INC 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.| 00108WAF7 vs. Emerson Radio | 00108WAF7 vs. Acumen Pharmaceuticals | 00108WAF7 vs. Spyre Therapeutics | 00108WAF7 vs. Thor Industries |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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