Correlation Between American Commerce and GE Aerospace
Can any of the company-specific risk be diversified away by investing in both American Commerce and GE Aerospace 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 American Commerce and GE Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Commerce Solutions and GE Aerospace, you can compare the effects of market volatilities on American Commerce and GE Aerospace 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 American Commerce with a short position of GE Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Commerce and GE Aerospace.
Diversification Opportunities for American Commerce and GE Aerospace
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and GE Aerospace is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Commerce Solutions and GE Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Aerospace and American Commerce 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 American Commerce Solutions are associated (or correlated) with GE Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE Aerospace has no effect on the direction of American Commerce i.e., American Commerce and GE Aerospace go up and down completely randomly.
Pair Corralation between American Commerce and GE Aerospace
If you would invest 8,884 in GE Aerospace on September 12, 2024 and sell it today you would earn a total of 8,008 from holding GE Aerospace or generate 90.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.7% |
| Values | Daily Returns |
American Commerce Solutions vs. GE Aerospace
Performance |
| Timeline |
| American Commerce |
| GE Aerospace |
American Commerce and GE Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Commerce and GE Aerospace
The main advantage of trading using opposite American Commerce and GE Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Commerce position performs unexpectedly, GE Aerospace 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 GE Aerospace will offset losses from the drop in GE Aerospace's long position.| American Commerce vs. Aumann AG | American Commerce vs. Alfa Laval AB | American Commerce vs. Arista Power | American Commerce vs. Atlas Copco AB |
| GE Aerospace vs. Victory Integrity Smallmid Cap | GE Aerospace vs. Hilton Worldwide Holdings | GE Aerospace vs. NVIDIA | GE Aerospace vs. JPMorgan Chase Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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