Correlation Between Garda and 00108WAF7
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By analyzing existing cross correlation between Garda World Security and AEP TEX INC, you can compare the effects of market volatilities on Garda 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 Garda with a short position of 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda and 00108WAF7.
Diversification Opportunities for Garda and 00108WAF7
Significant diversification
The 3 months correlation between Garda and 00108WAF7 is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Garda World Security 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 Garda 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 Garda World Security 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 Garda i.e., Garda and 00108WAF7 go up and down completely randomly.
Pair Corralation between Garda and 00108WAF7
Assuming the 90 days trading horizon Garda is expected to generate 2.02 times less return on investment than 00108WAF7. But when comparing it to its historical volatility, Garda World Security is 1.42 times less risky than 00108WAF7. It trades about 0.09 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 7,888 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 Together |
| Strength | Insignificant |
| Accuracy | 74.26% |
| Values | Daily Returns |
Garda World Security vs. AEP TEX INC
Performance |
| Timeline |
| Garda World Security |
| AEP TEX INC |
Garda and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garda and 00108WAF7
The main advantage of trading using opposite Garda and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garda 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.| Garda vs. AEP TEX INC | Garda vs. US BANK NATIONAL | Garda vs. FactSet Research Systems | Garda vs. Golden Agri Resources |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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