Correlation Between GE Aerospace and AB International
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and AB International 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 GE Aerospace and AB International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and AB International Group, you can compare the effects of market volatilities on GE Aerospace and AB International 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 GE Aerospace with a short position of AB International. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and AB International.
Diversification Opportunities for GE Aerospace and AB International
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GE Aerospace and ABQQ is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and AB International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB International and GE Aerospace 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 GE Aerospace are associated (or correlated) with AB International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB International has no effect on the direction of GE Aerospace i.e., GE Aerospace and AB International go up and down completely randomly.
Pair Corralation between GE Aerospace and AB International
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 0.17 times more return on investment than AB International. However, GE Aerospace is 5.97 times less risky than AB International. It trades about 0.47 of its potential returns per unit of risk. AB International Group is currently generating about -0.23 per unit of risk. If you would invest 16,859 in GE Aerospace on November 3, 2024 and sell it today you would earn a total of 3,498 from holding GE Aerospace or generate 20.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
GE Aerospace vs. AB International Group
Performance |
| Timeline |
| GE Aerospace |
| AB International |
GE Aerospace and AB International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and AB International
The main advantage of trading using opposite GE Aerospace and AB International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, AB International 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 AB International will offset losses from the drop in AB International's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| AB International vs. Peer To Peer | AB International vs. AppYea Inc | AB International vs. Image Protect | AB International vs. Bowmo Inc |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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