Correlation Between NUSTAR and 00108WAF7
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By analyzing existing cross correlation between NUSTAR LOGISTICS L and AEP TEX INC, you can compare the effects of market volatilities on NUSTAR 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 NUSTAR with a short position of 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of NUSTAR and 00108WAF7.
Diversification Opportunities for NUSTAR and 00108WAF7
Significant diversification
The 3 months correlation between NUSTAR and 00108WAF7 is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding NUSTAR LOGISTICS L 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 NUSTAR 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 NUSTAR LOGISTICS L 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 NUSTAR i.e., NUSTAR and 00108WAF7 go up and down completely randomly.
Pair Corralation between NUSTAR and 00108WAF7
Assuming the 90 days trading horizon NUSTAR LOGISTICS L is expected to generate 0.5 times more return on investment than 00108WAF7. However, NUSTAR LOGISTICS L is 1.98 times less risky than 00108WAF7. It trades about -0.04 of its potential returns per unit of risk. AEP TEX INC is currently generating about -0.05 per unit of risk. If you would invest 10,182 in NUSTAR LOGISTICS L on August 31, 2024 and sell it today you would lose (235.00) from holding NUSTAR LOGISTICS L or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.18% |
| Values | Daily Returns |
NUSTAR LOGISTICS L vs. AEP TEX INC
Performance |
| Timeline |
| NUSTAR LOGISTICS L |
| AEP TEX INC |
NUSTAR and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NUSTAR and 00108WAF7
The main advantage of trading using opposite NUSTAR and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NUSTAR 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 NUSTAR LOGISTICS L 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. 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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