Correlation Between 49446RAZ2 and 00108WAF7
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By analyzing existing cross correlation between KIM 32 01 APR 32 and AEP TEX INC, you can compare the effects of market volatilities on 49446RAZ2 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 49446RAZ2 with a short position of 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of 49446RAZ2 and 00108WAF7.
Diversification Opportunities for 49446RAZ2 and 00108WAF7
Good diversification
The 3 months correlation between 49446RAZ2 and 00108WAF7 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding KIM 32 01 APR 32 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 49446RAZ2 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 32 01 APR 32 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 49446RAZ2 i.e., 49446RAZ2 and 00108WAF7 go up and down completely randomly.
Pair Corralation between 49446RAZ2 and 00108WAF7
Assuming the 90 days trading horizon KIM 32 01 APR 32 is expected to under-perform the 00108WAF7. But the bond apears to be less risky and, when comparing its historical volatility, KIM 32 01 APR 32 is 162.78 times less risky than 00108WAF7. The bond trades about -0.16 of its potential returns per unit of risk. The AEP TEX INC is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 0.00 in AEP TEX INC on September 13, 2024 and sell it today you would earn a total of 7,668 from holding AEP TEX INC or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.75% |
| Values | Daily Returns |
KIM 32 01 APR 32 vs. AEP TEX INC
Performance |
| Timeline |
| KIM 32 01 |
| AEP TEX INC |
49446RAZ2 and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 49446RAZ2 and 00108WAF7
The main advantage of trading using opposite 49446RAZ2 and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 49446RAZ2 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.| 49446RAZ2 vs. AEP TEX INC | 49446RAZ2 vs. US BANK NATIONAL | 49446RAZ2 vs. Alphabet Inc Class C | 49446RAZ2 vs. InMode |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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