Correlation Between 00108WAF7 and JPMORGAN
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By analyzing existing cross correlation between AEP TEX INC and JPMORGAN CHASE CO, you can compare the effects of market volatilities on 00108WAF7 and JPMORGAN 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 00108WAF7 with a short position of JPMORGAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and JPMORGAN.
Diversification Opportunities for 00108WAF7 and JPMORGAN
Significant diversification
The 3 months correlation between 00108WAF7 and JPMORGAN is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and JPMORGAN CHASE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMORGAN CHASE CO and 00108WAF7 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 AEP TEX INC are associated (or correlated) with JPMORGAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMORGAN CHASE CO has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and JPMORGAN go up and down completely randomly.
Pair Corralation between 00108WAF7 and JPMORGAN
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 216.88 times more return on investment than JPMORGAN. However, 00108WAF7 is 216.88 times more volatile than JPMORGAN CHASE CO. It trades about 0.13 of its potential returns per unit of risk. JPMORGAN CHASE CO is currently generating about -0.13 per unit of risk. If you would invest 7,746 in AEP TEX INC on September 12, 2024 and sell it today you would lose (78.00) from holding AEP TEX INC or give up 1.01% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 77.42% |
Values | Daily Returns |
AEP TEX INC vs. JPMORGAN CHASE CO
Performance |
Timeline |
AEP TEX INC |
JPMORGAN CHASE CO |
00108WAF7 and JPMORGAN Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 00108WAF7 and JPMORGAN
The main advantage of trading using opposite 00108WAF7 and JPMORGAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, JPMORGAN 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 JPMORGAN will offset losses from the drop in JPMORGAN's long position.The idea behind AEP TEX INC and JPMORGAN CHASE CO 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.JPMORGAN vs. Park Electrochemical | JPMORGAN vs. Luxfer Holdings PLC | JPMORGAN vs. Summa Silver Corp | JPMORGAN vs. Zijin Mining Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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