Correlation Between GE Aerospace and DBX ETF
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and DBX ETF 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 DBX ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and DBX ETF Trust, you can compare the effects of market volatilities on GE Aerospace and DBX ETF 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 DBX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and DBX ETF.
Diversification Opportunities for GE Aerospace and DBX ETF
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GE Aerospace and DBX is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust 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 DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of GE Aerospace i.e., GE Aerospace and DBX ETF go up and down completely randomly.
Pair Corralation between GE Aerospace and DBX ETF
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 2.65 times more return on investment than DBX ETF. However, GE Aerospace is 2.65 times more volatile than DBX ETF Trust. It trades about 0.19 of its potential returns per unit of risk. DBX ETF Trust is currently generating about 0.35 per unit of risk. If you would invest 17,178 in GE Aerospace on September 1, 2024 and sell it today you would earn a total of 1,038 from holding GE Aerospace or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Aerospace vs. DBX ETF Trust
Performance |
| Timeline |
| GE Aerospace |
| DBX ETF Trust |
GE Aerospace and DBX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and DBX ETF
The main advantage of trading using opposite GE Aerospace and DBX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, DBX ETF 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 DBX ETF will offset losses from the drop in DBX ETF's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| DBX ETF vs. Franklin Templeton ETF | DBX ETF vs. Altrius Global Dividend | DBX ETF vs. Invesco Exchange Traded | DBX ETF vs. Franklin International Core |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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