Correlation Between 29364WBL1 and 00108WAF7
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By analyzing existing cross correlation between ETR 475 15 SEP 52 and AEP TEX INC, you can compare the effects of market volatilities on 29364WBL1 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 29364WBL1 with a short position of 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of 29364WBL1 and 00108WAF7.
Diversification Opportunities for 29364WBL1 and 00108WAF7
Good diversification
The 3 months correlation between 29364WBL1 and 00108WAF7 is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding ETR 475 15 SEP 52 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 29364WBL1 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 ETR 475 15 SEP 52 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 29364WBL1 i.e., 29364WBL1 and 00108WAF7 go up and down completely randomly.
Pair Corralation between 29364WBL1 and 00108WAF7
Assuming the 90 days trading horizon ETR 475 15 SEP 52 is expected to under-perform the 00108WAF7. But the bond apears to be less risky and, when comparing its historical volatility, ETR 475 15 SEP 52 is 115.8 times less risky than 00108WAF7. The bond trades about -0.01 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 7,888 in AEP TEX INC on August 31, 2024 and sell it today you would lose (799.00) from holding AEP TEX INC or give up 10.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.19% |
| Values | Daily Returns |
ETR 475 15 SEP 52 vs. AEP TEX INC
Performance |
| Timeline |
| ETR 475 15 |
| AEP TEX INC |
29364WBL1 and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 29364WBL1 and 00108WAF7
The main advantage of trading using opposite 29364WBL1 and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 29364WBL1 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.| 29364WBL1 vs. SmartStop Self Storage | 29364WBL1 vs. Definitive Healthcare Corp | 29364WBL1 vs. Sapiens International | 29364WBL1 vs. Stepan Company |
| 00108WAF7 vs. Asure Software | 00108WAF7 vs. Casio Computer Co | 00108WAF7 vs. Haverty Furniture Companies | 00108WAF7 vs. SL Green Realty |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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