Correlation Between Arrow Electronics and GENERAL
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By analyzing existing cross correlation between Arrow Electronics and GENERAL ELEC CAP, you can compare the effects of market volatilities on Arrow Electronics and GENERAL 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 Arrow Electronics with a short position of GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and GENERAL.
Diversification Opportunities for Arrow Electronics and GENERAL
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arrow and GENERAL is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics and GENERAL ELEC CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL ELEC CAP and Arrow Electronics 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 Arrow Electronics are associated (or correlated) with GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL ELEC CAP has no effect on the direction of Arrow Electronics i.e., Arrow Electronics and GENERAL go up and down completely randomly.
Pair Corralation between Arrow Electronics and GENERAL
Considering the 90-day investment horizon Arrow Electronics is expected to generate 0.63 times more return on investment than GENERAL. However, Arrow Electronics is 1.59 times less risky than GENERAL. It trades about 0.18 of its potential returns per unit of risk. GENERAL ELEC CAP is currently generating about -0.19 per unit of risk. If you would invest 11,622 in Arrow Electronics on September 13, 2024 and sell it today you would earn a total of 620.00 from holding Arrow Electronics or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 54.55% |
| Values | Daily Returns |
Arrow Electronics vs. GENERAL ELEC CAP
Performance |
| Timeline |
| Arrow Electronics |
| GENERAL ELEC CAP |
Arrow Electronics and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Electronics and GENERAL
The main advantage of trading using opposite Arrow Electronics and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Electronics position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. Synnex | Arrow Electronics vs. Climb Global Solutions | Arrow Electronics vs. ScanSource |
| GENERAL vs. Monster Beverage Corp | GENERAL vs. Park Electrochemical | GENERAL vs. China Tontine Wines | GENERAL vs. Luxfer Holdings PLC |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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