Correlation Between GE Aerospace and Aztlan Global
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Aztlan Global 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 Aztlan Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Aztlan Global Stock, you can compare the effects of market volatilities on GE Aerospace and Aztlan Global 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 Aztlan Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Aztlan Global.
Diversification Opportunities for GE Aerospace and Aztlan Global
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GE Aerospace and Aztlan is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Aztlan Global Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aztlan Global Stock 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 Aztlan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aztlan Global Stock has no effect on the direction of GE Aerospace i.e., GE Aerospace and Aztlan Global go up and down completely randomly.
Pair Corralation between GE Aerospace and Aztlan Global
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 1.25 times less return on investment than Aztlan Global. In addition to that, GE Aerospace is 1.7 times more volatile than Aztlan Global Stock. It trades about 0.16 of its total potential returns per unit of risk. Aztlan Global Stock is currently generating about 0.34 per unit of volatility. If you would invest 2,345 in Aztlan Global Stock on September 3, 2024 and sell it today you would earn a total of 155.00 from holding Aztlan Global Stock or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Aerospace vs. Aztlan Global Stock
Performance |
| Timeline |
| GE Aerospace |
| Aztlan Global Stock |
GE Aerospace and Aztlan Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Aztlan Global
The main advantage of trading using opposite GE Aerospace and Aztlan Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Aztlan Global 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 Aztlan Global will offset losses from the drop in Aztlan Global's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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