Correlation Between GE Aerospace and ProShares
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and ProShares 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 ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and ProShares SP Technology, you can compare the effects of market volatilities on GE Aerospace and ProShares 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 ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and ProShares.
Diversification Opportunities for GE Aerospace and ProShares
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GE Aerospace and ProShares is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and ProShares SP Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP Technology 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 ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP Technology has no effect on the direction of GE Aerospace i.e., GE Aerospace and ProShares go up and down completely randomly.
Pair Corralation between GE Aerospace and ProShares
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 1.62 times more return on investment than ProShares. However, GE Aerospace is 1.62 times more volatile than ProShares SP Technology. It trades about 0.16 of its potential returns per unit of risk. ProShares SP Technology is currently generating about 0.07 per unit of risk. If you would invest 5,029 in GE Aerospace on August 30, 2024 and sell it today you would earn a total of 13,031 from holding GE Aerospace or generate 259.12% 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. ProShares SP Technology
Performance |
| Timeline |
| GE Aerospace |
| ProShares SP Technology |
GE Aerospace and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and ProShares
The main advantage of trading using opposite GE Aerospace and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, ProShares 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 ProShares will offset losses from the drop in ProShares' long position.| GE Aerospace vs. Parker Hannifin | GE Aerospace vs. Capital Income Builder | GE Aerospace vs. Direxion Daily FTSE | GE Aerospace vs. Dodge Global Stock |
| ProShares vs. Nexalin Technology | ProShares vs. Kilroy Realty Corp | ProShares vs. Highwoods Properties | ProShares vs. Karat Packaging |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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