Correlation Between GE Aerospace and BlackRock Floating
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and BlackRock Floating 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 BlackRock Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and BlackRock Floating Rate, you can compare the effects of market volatilities on GE Aerospace and BlackRock Floating 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 BlackRock Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and BlackRock Floating.
Diversification Opportunities for GE Aerospace and BlackRock Floating
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GE Aerospace and BlackRock is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and BlackRock Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Floating Rate 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 BlackRock Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Floating Rate has no effect on the direction of GE Aerospace i.e., GE Aerospace and BlackRock Floating go up and down completely randomly.
Pair Corralation between GE Aerospace and BlackRock Floating
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 4.2 times more return on investment than BlackRock Floating. However, GE Aerospace is 4.2 times more volatile than BlackRock Floating Rate. It trades about 0.45 of its potential returns per unit of risk. BlackRock Floating Rate is currently generating about 0.06 per unit of risk. If you would invest 17,289 in GE Aerospace on November 9, 2024 and sell it today you would earn a total of 3,317 from holding GE Aerospace or generate 19.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Aerospace vs. BlackRock Floating Rate
Performance |
| Timeline |
| GE Aerospace |
| BlackRock Floating Rate |
GE Aerospace and BlackRock Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and BlackRock Floating
The main advantage of trading using opposite GE Aerospace and BlackRock Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, BlackRock Floating 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 BlackRock Floating will offset losses from the drop in BlackRock Floating's long position.| GE Aerospace vs. Great Western Minerals | GE Aerospace vs. Enterprise Bancorp | GE Aerospace vs. T Rowe Price | GE Aerospace vs. Aviat Networks |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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