Correlation Between GE Aerospace and Navitas Semiconductor
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Navitas Semiconductor 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 Navitas Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Navitas Semiconductor Corp, you can compare the effects of market volatilities on GE Aerospace and Navitas Semiconductor 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 Navitas Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Navitas Semiconductor.
Diversification Opportunities for GE Aerospace and Navitas Semiconductor
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GE Aerospace and Navitas is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Navitas Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navitas Semiconductor 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 Navitas Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navitas Semiconductor has no effect on the direction of GE Aerospace i.e., GE Aerospace and Navitas Semiconductor go up and down completely randomly.
Pair Corralation between GE Aerospace and Navitas Semiconductor
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 0.33 times more return on investment than Navitas Semiconductor. However, GE Aerospace is 3.07 times less risky than Navitas Semiconductor. It trades about 0.45 of its potential returns per unit of risk. Navitas Semiconductor Corp is currently generating about -0.07 per unit of risk. If you would invest 17,289 in GE Aerospace on November 9, 2024 and sell it today you would earn a total of 3,317 from holding GE Aerospace or generate 19.19% 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. Navitas Semiconductor Corp
Performance |
| Timeline |
| GE Aerospace |
| Navitas Semiconductor |
GE Aerospace and Navitas Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Navitas Semiconductor
The main advantage of trading using opposite GE Aerospace and Navitas Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Navitas Semiconductor 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 Navitas Semiconductor will offset losses from the drop in Navitas Semiconductor's long position.| GE Aerospace vs. Great Western Minerals | GE Aerospace vs. Enterprise Bancorp | GE Aerospace vs. T Rowe Price | GE Aerospace vs. Aviat Networks |
| Navitas Semiconductor vs. ON Semiconductor | Navitas Semiconductor vs. Monolithic Power Systems | Navitas Semiconductor vs. Globalfoundries | Navitas Semiconductor vs. Analog Devices |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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