Correlation Between GE Aerospace and Nuveen Short
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Nuveen Short 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 Nuveen Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Nuveen Short Duration High, you can compare the effects of market volatilities on GE Aerospace and Nuveen Short 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 Nuveen Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Nuveen Short.
Diversification Opportunities for GE Aerospace and Nuveen Short
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GE Aerospace and Nuveen is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Nuveen Short Duration High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Short Duration 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 Nuveen Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Short Duration has no effect on the direction of GE Aerospace i.e., GE Aerospace and Nuveen Short go up and down completely randomly.
Pair Corralation between GE Aerospace and Nuveen Short
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 9.21 times more return on investment than Nuveen Short. However, GE Aerospace is 9.21 times more volatile than Nuveen Short Duration High. It trades about 0.13 of its potential returns per unit of risk. Nuveen Short Duration High is currently generating about 0.09 per unit of risk. If you would invest 7,466 in GE Aerospace on November 27, 2024 and sell it today you would earn a total of 12,405 from holding GE Aerospace or generate 166.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Aerospace vs. Nuveen Short Duration High
Performance |
| Timeline |
| GE Aerospace |
| Nuveen Short Duration |
GE Aerospace and Nuveen Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Nuveen Short
The main advantage of trading using opposite GE Aerospace and Nuveen Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Nuveen Short 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 Nuveen Short will offset losses from the drop in Nuveen Short's 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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