Correlation Between GE Aerospace and One Choice
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and One Choice 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 One Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and One Choice In, you can compare the effects of market volatilities on GE Aerospace and One Choice 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 One Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and One Choice.
Diversification Opportunities for GE Aerospace and One Choice
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GE Aerospace and One is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and One Choice In in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Choice In 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 One Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Choice In has no effect on the direction of GE Aerospace i.e., GE Aerospace and One Choice go up and down completely randomly.
Pair Corralation between GE Aerospace and One Choice
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 4.81 times more return on investment than One Choice. However, GE Aerospace is 4.81 times more volatile than One Choice In. It trades about 0.1 of its potential returns per unit of risk. One Choice In is currently generating about 0.15 per unit of risk. If you would invest 17,536 in GE Aerospace on August 29, 2024 and sell it today you would earn a total of 590.00 from holding GE Aerospace or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Aerospace vs. One Choice In
Performance |
| Timeline |
| GE Aerospace |
| One Choice In |
GE Aerospace and One Choice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and One Choice
The main advantage of trading using opposite GE Aerospace and One Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, One Choice 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 One Choice will offset losses from the drop in One Choice's long position.| GE Aerospace vs. Parker Hannifin | GE Aerospace vs. Capital Income Builder | GE Aerospace vs. Direxion Daily FTSE | GE Aerospace vs. Dodge Global Stock |
| One Choice vs. Victory High Income | One Choice vs. T Rowe Price | One Choice vs. Multimanager Lifestyle Aggressive | One Choice vs. Vanguard High Yield Tax Exempt |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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