Correlation Between 49446RAY5 and 00108WAF7
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By analyzing existing cross correlation between KIM 225 01 DEC 31 and AEP TEX INC, you can compare the effects of market volatilities on 49446RAY5 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 49446RAY5 with a short position of 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of 49446RAY5 and 00108WAF7.
Diversification Opportunities for 49446RAY5 and 00108WAF7
Very good diversification
The 3 months correlation between 49446RAY5 and 00108WAF7 is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding KIM 225 01 DEC 31 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 49446RAY5 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 KIM 225 01 DEC 31 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 49446RAY5 i.e., 49446RAY5 and 00108WAF7 go up and down completely randomly.
Pair Corralation between 49446RAY5 and 00108WAF7
Assuming the 90 days trading horizon KIM 225 01 DEC 31 is expected to under-perform the 00108WAF7. But the bond apears to be less risky and, when comparing its historical volatility, KIM 225 01 DEC 31 is 2.21 times less risky than 00108WAF7. The bond trades about -0.17 of its potential returns per unit of risk. The AEP TEX INC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7,424 in AEP TEX INC on September 13, 2024 and sell it today you would earn a total of 244.00 from holding AEP TEX INC or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.86% |
| Values | Daily Returns |
KIM 225 01 DEC 31 vs. AEP TEX INC
Performance |
| Timeline |
| KIM 225 01 |
| AEP TEX INC |
49446RAY5 and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 49446RAY5 and 00108WAF7
The main advantage of trading using opposite 49446RAY5 and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 49446RAY5 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.| 49446RAY5 vs. Fortress Transp Infra | 49446RAY5 vs. Consol Energy | 49446RAY5 vs. Olympic Steel | 49446RAY5 vs. GMS Inc |
| 00108WAF7 vs. Dream Finders Homes | 00108WAF7 vs. ReTo Eco Solutions | 00108WAF7 vs. Magna International | 00108WAF7 vs. Tyson Foods |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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