Correlation Between GE Aerospace and ProShares Russell
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and ProShares Russell 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 Russell 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 Russell Dividend, you can compare the effects of market volatilities on GE Aerospace and ProShares Russell 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 Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and ProShares Russell.
Diversification Opportunities for GE Aerospace and ProShares Russell
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GE Aerospace and ProShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and ProShares Russell Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Russell 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 Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Russell has no effect on the direction of GE Aerospace i.e., GE Aerospace and ProShares Russell go up and down completely randomly.
Pair Corralation between GE Aerospace and ProShares Russell
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 2.1 times more return on investment than ProShares Russell. However, GE Aerospace is 2.1 times more volatile than ProShares Russell Dividend. It trades about 0.07 of its potential returns per unit of risk. ProShares Russell Dividend is currently generating about 0.09 per unit of risk. If you would invest 20,357 in GE Aerospace on December 2, 2024 and sell it today you would earn a total of 341.00 from holding GE Aerospace or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Aerospace vs. ProShares Russell Dividend
Performance |
| Timeline |
| GE Aerospace |
| ProShares Russell |
GE Aerospace and ProShares Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and ProShares Russell
The main advantage of trading using opposite GE Aerospace and ProShares Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, ProShares Russell 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 Russell will offset losses from the drop in ProShares Russell's long position.| GE Aerospace vs. Illinois Tool Works | ||
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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