Correlation Between GE Aerospace and Barrister Energy
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Barrister Energy 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 Barrister Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Barrister Energy LLC, you can compare the effects of market volatilities on GE Aerospace and Barrister Energy 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 Barrister Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Barrister Energy.
Diversification Opportunities for GE Aerospace and Barrister Energy
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GE Aerospace and Barrister is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Barrister Energy LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrister Energy LLC 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 Barrister Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrister Energy LLC has no effect on the direction of GE Aerospace i.e., GE Aerospace and Barrister Energy go up and down completely randomly.
Pair Corralation between GE Aerospace and Barrister Energy
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 3.49 times more return on investment than Barrister Energy. However, GE Aerospace is 3.49 times more volatile than Barrister Energy LLC. It trades about 0.15 of its potential returns per unit of risk. Barrister Energy LLC is currently generating about 0.16 per unit of risk. If you would invest 18,043 in GE Aerospace on November 3, 2024 and sell it today you would earn a total of 2,314 from holding GE Aerospace or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.56% |
| Values | Daily Returns |
GE Aerospace vs. Barrister Energy LLC
Performance |
| Timeline |
| GE Aerospace |
| Barrister Energy LLC |
GE Aerospace and Barrister Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Barrister Energy
The main advantage of trading using opposite GE Aerospace and Barrister Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Barrister Energy 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 Barrister Energy will offset losses from the drop in Barrister Energy's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| Barrister Energy vs. Buru Energy Limited | Barrister Energy vs. Altura Energy | Barrister Energy vs. Daybreak Oil and | Barrister Energy vs. Arrow Exploration Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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