Correlation Between 00108WAF7 and Consolidated Edison
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By analyzing existing cross correlation between AEP TEX INC and Consolidated Edison, you can compare the effects of market volatilities on 00108WAF7 and Consolidated Edison 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 Consolidated Edison. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and Consolidated Edison.
Diversification Opportunities for 00108WAF7 and Consolidated Edison
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 00108WAF7 and Consolidated is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and Consolidated Edison in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated Edison 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 Consolidated Edison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Edison has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and Consolidated Edison go up and down completely randomly.
Pair Corralation between 00108WAF7 and Consolidated Edison
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 4.19 times more return on investment than Consolidated Edison. However, 00108WAF7 is 4.19 times more volatile than Consolidated Edison. It trades about 0.11 of its potential returns per unit of risk. Consolidated Edison is currently generating about -0.24 per unit of risk. If you would invest 7,108 in AEP TEX INC on March 13, 2024 and sell it today you would earn a total of 394.00 from holding AEP TEX INC or generate 5.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 70.0% |
Values | Daily Returns |
AEP TEX INC vs. Consolidated Edison
Performance |
Timeline |
AEP TEX INC |
Consolidated Edison |
00108WAF7 and Consolidated Edison Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 00108WAF7 and Consolidated Edison
The main advantage of trading using opposite 00108WAF7 and Consolidated Edison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, Consolidated Edison 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 Consolidated Edison will offset losses from the drop in Consolidated Edison's long position.00108WAF7 vs. US BANK NATIONAL | 00108WAF7 vs. Antero Midstream Partners | 00108WAF7 vs. The Charles Schwab | 00108WAF7 vs. Jeffs Brands |
Consolidated Edison vs. Duke Energy | Consolidated Edison vs. Dominion Energy | Consolidated Edison vs. American Electric Power | Consolidated Edison vs. Nextera Energy |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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