Correlation Between GE Aerospace and Argo Blockchain
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Argo Blockchain 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 Argo Blockchain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Argo Blockchain PLC, you can compare the effects of market volatilities on GE Aerospace and Argo Blockchain 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 Argo Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Argo Blockchain.
Diversification Opportunities for GE Aerospace and Argo Blockchain
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GE Aerospace and Argo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Argo Blockchain PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Blockchain PLC 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 Argo Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Blockchain PLC has no effect on the direction of GE Aerospace i.e., GE Aerospace and Argo Blockchain go up and down completely randomly.
Pair Corralation between GE Aerospace and Argo Blockchain
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 1.18 times less return on investment than Argo Blockchain. But when comparing it to its historical volatility, GE Aerospace is 4.51 times less risky than Argo Blockchain. It trades about 0.06 of its potential returns per unit of risk. Argo Blockchain PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Argo Blockchain PLC on September 1, 2024 and sell it today you would lose (4.00) from holding Argo Blockchain PLC or give up 26.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Aerospace vs. Argo Blockchain PLC
Performance |
| Timeline |
| GE Aerospace |
| Argo Blockchain PLC |
GE Aerospace and Argo Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Argo Blockchain
The main advantage of trading using opposite GE Aerospace and Argo Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Argo Blockchain 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 Argo Blockchain will offset losses from the drop in Argo Blockchain's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| Argo Blockchain vs. Morgan Stanley | Argo Blockchain vs. Goldman Sachs Group | Argo Blockchain vs. HUMANA INC | Argo Blockchain vs. SCOR PK |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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