Correlation Between GE Aerospace and Rondure Overseas
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Rondure Overseas 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 Rondure Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Rondure Overseas Fund, you can compare the effects of market volatilities on GE Aerospace and Rondure Overseas 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 Rondure Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Rondure Overseas.
Diversification Opportunities for GE Aerospace and Rondure Overseas
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GE Aerospace and Rondure is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Rondure Overseas Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rondure Overseas 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 Rondure Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rondure Overseas has no effect on the direction of GE Aerospace i.e., GE Aerospace and Rondure Overseas go up and down completely randomly.
Pair Corralation between GE Aerospace and Rondure Overseas
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 2.21 times more return on investment than Rondure Overseas. However, GE Aerospace is 2.21 times more volatile than Rondure Overseas Fund. It trades about 0.16 of its potential returns per unit of risk. Rondure Overseas Fund is currently generating about 0.01 per unit of risk. If you would invest 5,118 in GE Aerospace on September 3, 2024 and sell it today you would earn a total of 13,098 from holding GE Aerospace or generate 255.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 30.91% |
| Values | Daily Returns |
GE Aerospace vs. Rondure Overseas Fund
Performance |
| Timeline |
| GE Aerospace |
| Rondure Overseas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GE Aerospace and Rondure Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Rondure Overseas
The main advantage of trading using opposite GE Aerospace and Rondure Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Rondure Overseas 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 Rondure Overseas will offset losses from the drop in Rondure Overseas' 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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