Correlation Between GE Aerospace and Gold
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Gold 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 Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Gold And Gemstone, you can compare the effects of market volatilities on GE Aerospace and Gold 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 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Gold.
Diversification Opportunities for GE Aerospace and Gold
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GE Aerospace and Gold is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Gold And Gemstone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold And Gemstone 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 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold And Gemstone has no effect on the direction of GE Aerospace i.e., GE Aerospace and Gold go up and down completely randomly.
Pair Corralation between GE Aerospace and Gold
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 0.1 times more return on investment than Gold. However, GE Aerospace is 10.06 times less risky than Gold. It trades about 0.1 of its potential returns per unit of risk. Gold And Gemstone is currently generating about -0.01 per unit of risk. If you would invest 17,536 in GE Aerospace on August 29, 2024 and sell it today you would earn a total of 590.00 from holding GE Aerospace or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
GE Aerospace vs. Gold And Gemstone
Performance |
| Timeline |
| GE Aerospace |
| Gold And Gemstone |
GE Aerospace and Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Gold
The main advantage of trading using opposite GE Aerospace and Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Gold 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 Gold will offset losses from the drop in Gold's long position.| GE Aerospace vs. Parker Hannifin | GE Aerospace vs. Capital Income Builder | GE Aerospace vs. Direxion Daily FTSE | GE Aerospace vs. Dodge Global Stock |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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