Correlation Between GE Aerospace and Advanced Emissions
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Advanced Emissions 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 Advanced Emissions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Advanced Emissions Solutions, you can compare the effects of market volatilities on GE Aerospace and Advanced Emissions 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 Advanced Emissions. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Advanced Emissions.
Diversification Opportunities for GE Aerospace and Advanced Emissions
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GE Aerospace and Advanced is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Advanced Emissions Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Emissions 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 Advanced Emissions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Emissions has no effect on the direction of GE Aerospace i.e., GE Aerospace and Advanced Emissions go up and down completely randomly.
Pair Corralation between GE Aerospace and Advanced Emissions
If you would invest 17,405 in GE Aerospace on August 30, 2024 and sell it today you would earn a total of 655.00 from holding GE Aerospace or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
GE Aerospace vs. Advanced Emissions Solutions
Performance |
| Timeline |
| GE Aerospace |
| Advanced Emissions |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GE Aerospace and Advanced Emissions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Advanced Emissions
The main advantage of trading using opposite GE Aerospace and Advanced Emissions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Advanced Emissions 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 Advanced Emissions will offset losses from the drop in Advanced Emissions' long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| Advanced Emissions vs. Vow ASA | Advanced Emissions vs. Seychelle Environmtl | Advanced Emissions vs. Eestech | Advanced Emissions vs. Energy and Water |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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