Correlation Between GE Aerospace and KraneShares
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and KraneShares 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 KraneShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and KraneShares, you can compare the effects of market volatilities on GE Aerospace and KraneShares 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 KraneShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and KraneShares.
Diversification Opportunities for GE Aerospace and KraneShares
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GE Aerospace and KraneShares is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and KraneShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares 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 KraneShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares has no effect on the direction of GE Aerospace i.e., GE Aerospace and KraneShares go up and down completely randomly.
Pair Corralation between GE Aerospace and KraneShares
If you would invest 17,176 in GE Aerospace on September 4, 2024 and sell it today you would earn a total of 868.00 from holding GE Aerospace or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
GE Aerospace vs. KraneShares
Performance |
| Timeline |
| GE Aerospace |
| KraneShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
GE Aerospace and KraneShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and KraneShares
The main advantage of trading using opposite GE Aerospace and KraneShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, KraneShares 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 KraneShares will offset losses from the drop in KraneShares' long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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