Correlation Between GE Aerospace and Social Capital
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Social Capital 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 Social Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Social Capital Suvretta, you can compare the effects of market volatilities on GE Aerospace and Social Capital 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 Social Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Social Capital.
Diversification Opportunities for GE Aerospace and Social Capital
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GE Aerospace and Social is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Social Capital Suvretta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Social Capital Suvretta 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 Social Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Social Capital Suvretta has no effect on the direction of GE Aerospace i.e., GE Aerospace and Social Capital go up and down completely randomly.
Pair Corralation between GE Aerospace and Social Capital
If you would invest 16,859 in GE Aerospace on November 3, 2024 and sell it today you would earn a total of 3,498 from holding GE Aerospace or generate 20.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
GE Aerospace vs. Social Capital Suvretta
Performance |
| Timeline |
| GE Aerospace |
| Social Capital Suvretta |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GE Aerospace and Social Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Social Capital
The main advantage of trading using opposite GE Aerospace and Social Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Social Capital 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 Social Capital will offset losses from the drop in Social Capital's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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