Correlation Between GE Aerospace and Bantek
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Bantek 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 Bantek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Bantek Inc, you can compare the effects of market volatilities on GE Aerospace and Bantek 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 Bantek. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Bantek.
Diversification Opportunities for GE Aerospace and Bantek
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GE Aerospace and Bantek is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Bantek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bantek Inc 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 Bantek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bantek Inc has no effect on the direction of GE Aerospace i.e., GE Aerospace and Bantek go up and down completely randomly.
Pair Corralation between GE Aerospace and Bantek
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 17.07 times less return on investment than Bantek. But when comparing it to its historical volatility, GE Aerospace is 13.25 times less risky than Bantek. It trades about 0.19 of its potential returns per unit of risk. Bantek Inc is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 0.12 in Bantek Inc on September 2, 2024 and sell it today you would earn a total of 0.11 from holding Bantek Inc or generate 91.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Aerospace vs. Bantek Inc
Performance |
| Timeline |
| GE Aerospace |
| Bantek Inc |
GE Aerospace and Bantek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Bantek
The main advantage of trading using opposite GE Aerospace and Bantek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Bantek 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 Bantek will offset losses from the drop in Bantek'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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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