Correlation Between GE Aerospace and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and ProShares UltraShort 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 ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and ProShares UltraShort MSCI, you can compare the effects of market volatilities on GE Aerospace and ProShares UltraShort 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 ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and ProShares UltraShort.
Diversification Opportunities for GE Aerospace and ProShares UltraShort
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GE Aerospace and ProShares is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and ProShares UltraShort MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort MSCI 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 ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort MSCI has no effect on the direction of GE Aerospace i.e., GE Aerospace and ProShares UltraShort go up and down completely randomly.
Pair Corralation between GE Aerospace and ProShares UltraShort
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 0.58 times more return on investment than ProShares UltraShort. However, GE Aerospace is 1.72 times less risky than ProShares UltraShort. It trades about 0.15 of its potential returns per unit of risk. ProShares UltraShort MSCI is currently generating about 0.01 per unit of risk. If you would invest 5,055 in GE Aerospace on September 13, 2024 and sell it today you would earn a total of 11,428 from holding GE Aerospace or generate 226.07% 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. ProShares UltraShort MSCI
Performance |
| Timeline |
| GE Aerospace |
| ProShares UltraShort MSCI |
GE Aerospace and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and ProShares UltraShort
The main advantage of trading using opposite GE Aerospace and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, ProShares UltraShort 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 ProShares UltraShort will offset losses from the drop in ProShares UltraShort's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| ProShares UltraShort vs. ProShares UltraShort FTSE | ProShares UltraShort vs. ProShares UltraShort MSCI | ProShares UltraShort vs. ProShares Ultra MSCI | ProShares UltraShort vs. ProShares UltraShort MSCI |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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