Correlation Between GE Aerospace and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Tidal Trust 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 Tidal Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Tidal Trust II, you can compare the effects of market volatilities on GE Aerospace and Tidal Trust 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 Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Tidal Trust.
Diversification Opportunities for GE Aerospace and Tidal Trust
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GE Aerospace and Tidal is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Tidal Trust II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust II 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 Tidal Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Trust II has no effect on the direction of GE Aerospace i.e., GE Aerospace and Tidal Trust go up and down completely randomly.
Pair Corralation between GE Aerospace and Tidal Trust
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 0.88 times more return on investment than Tidal Trust. However, GE Aerospace is 1.14 times less risky than Tidal Trust. It trades about 0.11 of its potential returns per unit of risk. Tidal Trust II is currently generating about -0.07 per unit of risk. If you would invest 17,536 in GE Aerospace on August 27, 2024 and sell it today you would earn a total of 579.00 from holding GE Aerospace or generate 3.3% 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. Tidal Trust II
Performance |
| Timeline |
| GE Aerospace |
| Tidal Trust II |
GE Aerospace and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Tidal Trust
The main advantage of trading using opposite GE Aerospace and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Tidal Trust 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 Tidal Trust will offset losses from the drop in Tidal Trust's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| Tidal Trust vs. Tidal Trust II | Tidal Trust vs. First Trust Dorsey | Tidal Trust vs. Direxion Daily META | Tidal Trust vs. Direxion Daily META |
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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