Correlation Between GE Aerospace and Sylvania Platinum
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Sylvania Platinum 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 Sylvania Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Sylvania Platinum Limited, you can compare the effects of market volatilities on GE Aerospace and Sylvania Platinum 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 Sylvania Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Sylvania Platinum.
Diversification Opportunities for GE Aerospace and Sylvania Platinum
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GE Aerospace and Sylvania is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Sylvania Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sylvania Platinum 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 Sylvania Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sylvania Platinum has no effect on the direction of GE Aerospace i.e., GE Aerospace and Sylvania Platinum go up and down completely randomly.
Pair Corralation between GE Aerospace and Sylvania Platinum
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 0.28 times more return on investment than Sylvania Platinum. However, GE Aerospace is 3.52 times less risky than Sylvania Platinum. It trades about 0.16 of its potential returns per unit of risk. Sylvania Platinum Limited is currently generating about 0.0 per unit of risk. If you would invest 5,138 in GE Aerospace on September 2, 2024 and sell it today you would earn a total of 13,078 from holding GE Aerospace or generate 254.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 74.6% |
| Values | Daily Returns |
GE Aerospace vs. Sylvania Platinum Limited
Performance |
| Timeline |
| GE Aerospace |
| Sylvania Platinum |
GE Aerospace and Sylvania Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Sylvania Platinum
The main advantage of trading using opposite GE Aerospace and Sylvania Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Sylvania Platinum 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 Sylvania Platinum will offset losses from the drop in Sylvania Platinum's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| Sylvania Platinum vs. Clifton Mining Co | Sylvania Platinum vs. Cartier Iron Corp | Sylvania Platinum vs. Alien Metals | Sylvania Platinum vs. Mantaro Silver Corp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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