Correlation Between GE Aerospace and APAC Old
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and APAC Old 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 APAC Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and APAC Old, you can compare the effects of market volatilities on GE Aerospace and APAC Old 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 APAC Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and APAC Old.
Diversification Opportunities for GE Aerospace and APAC Old
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GE Aerospace and APAC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and APAC Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APAC Old 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 APAC Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APAC Old has no effect on the direction of GE Aerospace i.e., GE Aerospace and APAC Old go up and down completely randomly.
Pair Corralation between GE Aerospace and APAC Old
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 6.6 times more return on investment than APAC Old. However, GE Aerospace is 6.6 times more volatile than APAC Old. It trades about 0.14 of its potential returns per unit of risk. APAC Old is currently generating about 0.15 per unit of risk. If you would invest 6,479 in GE Aerospace on October 25, 2024 and sell it today you would earn a total of 12,357 from holding GE Aerospace or generate 190.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 23.94% |
| Values | Daily Returns |
GE Aerospace vs. APAC Old
Performance |
| Timeline |
| GE Aerospace |
| APAC Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GE Aerospace and APAC Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and APAC Old
The main advantage of trading using opposite GE Aerospace and APAC Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, APAC Old 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 APAC Old will offset losses from the drop in APAC Old's long position.| GE Aerospace vs. Bank of America | GE Aerospace vs. RLJ Lodging Trust | GE Aerospace vs. PennyMac Finl Svcs | GE Aerospace vs. Newhydrogen |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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