Correlation Between Brera Holdings and GE Aerospace
Can any of the company-specific risk be diversified away by investing in both Brera Holdings 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 Brera Holdings and GE Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brera Holdings PLC and GE Aerospace, you can compare the effects of market volatilities on Brera Holdings 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 Brera Holdings with a short position of GE Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brera Holdings and GE Aerospace.
Diversification Opportunities for Brera Holdings and GE Aerospace
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Brera and GE Aerospace is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Brera Holdings PLC and GE Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Aerospace and Brera Holdings 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 Brera Holdings PLC 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 Brera Holdings i.e., Brera Holdings and GE Aerospace go up and down completely randomly.
Pair Corralation between Brera Holdings and GE Aerospace
Given the investment horizon of 90 days Brera Holdings PLC is expected to generate 4.6 times more return on investment than GE Aerospace. However, Brera Holdings is 4.6 times more volatile than GE Aerospace. It trades about 0.07 of its potential returns per unit of risk. GE Aerospace is currently generating about 0.1 per unit of risk. If you would invest 71.00 in Brera Holdings PLC on September 3, 2024 and sell it today you would earn a total of 14.00 from holding Brera Holdings PLC or generate 19.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brera Holdings PLC vs. GE Aerospace
Performance |
| Timeline |
| Brera Holdings PLC |
| GE Aerospace |
Brera Holdings and GE Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brera Holdings and GE Aerospace
The main advantage of trading using opposite Brera Holdings and GE Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brera Holdings 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.| Brera Holdings vs. Reading International B | Brera Holdings vs. Marcus | Brera Holdings vs. Reading International | Brera Holdings vs. LiveOne |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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