Correlation Between GE Aerospace and Umpqua Holdings
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Umpqua Holdings 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 Umpqua Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Umpqua Holdings, you can compare the effects of market volatilities on GE Aerospace and Umpqua Holdings 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 Umpqua Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Umpqua Holdings.
Diversification Opportunities for GE Aerospace and Umpqua Holdings
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GE Aerospace and Umpqua is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Umpqua Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Umpqua Holdings 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 Umpqua Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Umpqua Holdings has no effect on the direction of GE Aerospace i.e., GE Aerospace and Umpqua Holdings go up and down completely randomly.
Pair Corralation between GE Aerospace and Umpqua Holdings
If you would invest 9,546 in GE Aerospace on September 4, 2024 and sell it today you would earn a total of 8,526 from holding GE Aerospace or generate 89.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
GE Aerospace vs. Umpqua Holdings
Performance |
| Timeline |
| GE Aerospace |
| Umpqua Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GE Aerospace and Umpqua Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Umpqua Holdings
The main advantage of trading using opposite GE Aerospace and Umpqua Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Umpqua Holdings 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 Umpqua Holdings will offset losses from the drop in Umpqua Holdings' long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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