Correlation Between GE Aerospace and Semantix
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Semantix 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 Semantix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Semantix, you can compare the effects of market volatilities on GE Aerospace and Semantix 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 Semantix. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Semantix.
Diversification Opportunities for GE Aerospace and Semantix
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GE Aerospace and Semantix is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Semantix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semantix 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 Semantix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semantix has no effect on the direction of GE Aerospace i.e., GE Aerospace and Semantix go up and down completely randomly.
Pair Corralation between GE Aerospace and Semantix
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 1.26 times less return on investment than Semantix. But when comparing it to its historical volatility, GE Aerospace is 8.82 times less risky than Semantix. It trades about 0.16 of its potential returns per unit of risk. Semantix is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 68.00 in Semantix on September 3, 2024 and sell it today you would lose (63.80) from holding Semantix or give up 93.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 76.57% |
| Values | Daily Returns |
GE Aerospace vs. Semantix
Performance |
| Timeline |
| GE Aerospace |
| Semantix |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GE Aerospace and Semantix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Semantix
The main advantage of trading using opposite GE Aerospace and Semantix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Semantix 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 Semantix will offset losses from the drop in Semantix's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| Semantix vs. Research Solutions | Semantix vs. Rayont Inc | Semantix vs. Shotspotter | Semantix vs. Issuer Direct 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |