Correlation Between GENERAL and 00108WAF7
Specify exactly 2 symbols:
By analyzing existing cross correlation between GENERAL ELEC CAP and AEP TEX INC, you can compare the effects of market volatilities on GENERAL 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 GENERAL with a short position of 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of GENERAL and 00108WAF7.
Diversification Opportunities for GENERAL and 00108WAF7
Good diversification
The 3 months correlation between GENERAL and 00108WAF7 is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding GENERAL ELEC CAP 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 GENERAL 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 GENERAL ELEC CAP 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 GENERAL i.e., GENERAL and 00108WAF7 go up and down completely randomly.
Pair Corralation between GENERAL and 00108WAF7
Assuming the 90 days trading horizon GENERAL is expected to generate 311.99 times less return on investment than 00108WAF7. But when comparing it to its historical volatility, GENERAL ELEC CAP is 51.3 times less risky than 00108WAF7. It trades about 0.02 of its potential returns per unit of risk. AEP TEX INC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7,158 in AEP TEX INC on September 5, 2024 and sell it today you would earn a total of 1,063 from holding AEP TEX INC or generate 14.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 70.11% |
| Values | Daily Returns |
GENERAL ELEC CAP vs. AEP TEX INC
Performance |
| Timeline |
| GENERAL ELEC CAP |
| AEP TEX INC |
GENERAL and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GENERAL and 00108WAF7
The main advantage of trading using opposite GENERAL and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GENERAL 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 GENERAL ELEC CAP 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. Oatly Group AB | 00108WAF7 vs. Constellation Brands Class | 00108WAF7 vs. Iridium Communications | 00108WAF7 vs. Compania Cervecerias Unidas |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |