Correlation Between 389375AL0 and 00108WAF7

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both 389375AL0 and 00108WAF7 at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining 389375AL0 and 00108WAF7 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GRAY TELEVISION INC and AEP TEX INC, you can compare the effects of market volatilities on 389375AL0 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 389375AL0 with a short position of 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of 389375AL0 and 00108WAF7.

Diversification Opportunities for 389375AL0 and 00108WAF7

389375AL000108WAF7Diversified Away389375AL000108WAF7Diversified Away100%
-0.05
  Correlation Coefficient

Good diversification

The 3 months correlation between 389375AL0 and 00108WAF7 is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding GRAY TELEVISION INC 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 389375AL0 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 GRAY TELEVISION INC 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 389375AL0 i.e., 389375AL0 and 00108WAF7 go up and down completely randomly.

Pair Corralation between 389375AL0 and 00108WAF7

Assuming the 90 days trading horizon 389375AL0 is expected to generate 45.1 times less return on investment than 00108WAF7. But when comparing it to its historical volatility, GRAY TELEVISION INC is 36.82 times less risky than 00108WAF7. It trades about 0.11 of its potential returns per unit of risk. AEP TEX INC is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  7,813  in AEP TEX INC on September 14, 2024 and sell it today you would lose (145.00) from holding AEP TEX INC or give up 1.86% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy77.42%
ValuesDaily Returns

GRAY TELEVISION INC  vs.  AEP TEX INC

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 0204060
JavaScript chart by amCharts 3.21.15389375AL0 00108WAF7
       Timeline  
GRAY TELEVISION INC 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in GRAY TELEVISION INC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, 389375AL0 sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.153022312260657075
AEP TEX INC 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in AEP TEX INC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, 00108WAF7 sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.1525234023302440238000

389375AL0 and 00108WAF7 Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-16.51-12.37-8.22-4.080.04.228.5812.9417.321.66 0.020.040.060.08
JavaScript chart by amCharts 3.21.15389375AL0 00108WAF7
       Returns  

Pair Trading with 389375AL0 and 00108WAF7

The main advantage of trading using opposite 389375AL0 and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 389375AL0 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 GRAY TELEVISION INC 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.
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

Other Complementary Tools

Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Content Syndication
Quickly integrate customizable finance content to your own investment portal
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios