Correlation Between GE Aerospace and NaturalShrimp
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and NaturalShrimp 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 NaturalShrimp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and NaturalShrimp, you can compare the effects of market volatilities on GE Aerospace and NaturalShrimp 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 NaturalShrimp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and NaturalShrimp.
Diversification Opportunities for GE Aerospace and NaturalShrimp
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between GE Aerospace and NaturalShrimp is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and NaturalShrimp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NaturalShrimp 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 NaturalShrimp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NaturalShrimp has no effect on the direction of GE Aerospace i.e., GE Aerospace and NaturalShrimp go up and down completely randomly.
Pair Corralation between GE Aerospace and NaturalShrimp
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 0.08 times more return on investment than NaturalShrimp. However, GE Aerospace is 12.31 times less risky than NaturalShrimp. It trades about 0.47 of its potential returns per unit of risk. NaturalShrimp is currently generating about -0.29 per unit of risk. If you would invest 17,187 in GE Aerospace on October 26, 2024 and sell it today you would earn a total of 2,893 from holding GE Aerospace or generate 16.83% 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. NaturalShrimp
Performance |
| Timeline |
| GE Aerospace |
| NaturalShrimp |
GE Aerospace and NaturalShrimp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and NaturalShrimp
The main advantage of trading using opposite GE Aerospace and NaturalShrimp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, NaturalShrimp 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 NaturalShrimp will offset losses from the drop in NaturalShrimp's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| NaturalShrimp vs. AgriFORCE Growing Systems | NaturalShrimp vs. Atlantic Sapphire ASA | NaturalShrimp vs. Village Farms International | NaturalShrimp vs. Australian Agricultural |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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