Correlation Between GE Aerospace and Shuttle Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Shuttle Pharmaceuticals, you can compare the effects of market volatilities on GE Aerospace and Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Shuttle Pharmaceuticals.
Diversification Opportunities for GE Aerospace and Shuttle Pharmaceuticals
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GE Aerospace and Shuttle is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Shuttle Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuttle Pharmaceuticals has no effect on the direction of GE Aerospace i.e., GE Aerospace and Shuttle Pharmaceuticals go up and down completely randomly.
Pair Corralation between GE Aerospace and Shuttle Pharmaceuticals
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 0.35 times more return on investment than Shuttle Pharmaceuticals. However, GE Aerospace is 2.82 times less risky than Shuttle Pharmaceuticals. It trades about 0.11 of its potential returns per unit of risk. Shuttle Pharmaceuticals is currently generating about -0.74 per unit of risk. If you would invest 17,464 in GE Aerospace on August 31, 2024 and sell it today you would earn a total of 596.00 from holding GE Aerospace or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Aerospace vs. Shuttle Pharmaceuticals
Performance |
| Timeline |
| GE Aerospace |
| Shuttle Pharmaceuticals |
GE Aerospace and Shuttle Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Shuttle Pharmaceuticals
The main advantage of trading using opposite GE Aerospace and Shuttle Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals will offset losses from the drop in Shuttle Pharmaceuticals' long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| Shuttle Pharmaceuticals vs. Bausch Health Companies | Shuttle Pharmaceuticals vs. Haleon plc | Shuttle Pharmaceuticals vs. Intracellular Th |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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