Correlation Between GE Aerospace and Taiyo Yuden
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Taiyo Yuden 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 Taiyo Yuden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Taiyo Yuden, you can compare the effects of market volatilities on GE Aerospace and Taiyo Yuden 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 Taiyo Yuden. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Taiyo Yuden.
Diversification Opportunities for GE Aerospace and Taiyo Yuden
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GE Aerospace and Taiyo is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Taiyo Yuden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiyo Yuden 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 Taiyo Yuden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiyo Yuden has no effect on the direction of GE Aerospace i.e., GE Aerospace and Taiyo Yuden go up and down completely randomly.
Pair Corralation between GE Aerospace and Taiyo Yuden
If you would invest 17,170 in GE Aerospace on September 2, 2024 and sell it today you would earn a total of 1,046 from holding GE Aerospace or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
GE Aerospace vs. Taiyo Yuden
Performance |
| Timeline |
| GE Aerospace |
| Taiyo Yuden |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GE Aerospace and Taiyo Yuden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Taiyo Yuden
The main advantage of trading using opposite GE Aerospace and Taiyo Yuden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Taiyo Yuden 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 Taiyo Yuden will offset losses from the drop in Taiyo Yuden's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| Taiyo Yuden vs. Upper Street Marketing | Taiyo Yuden vs. Sea | Taiyo Yuden vs. Ispire Technology Common | Taiyo Yuden vs. Keurig Dr Pepper |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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