Correlation Between GE Aerospace and ABBVIE
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By analyzing existing cross correlation between GE Aerospace and ABBVIE INC 44, you can compare the effects of market volatilities on GE Aerospace and ABBVIE 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 ABBVIE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and ABBVIE.
Diversification Opportunities for GE Aerospace and ABBVIE
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between GE Aerospace and ABBVIE is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and ABBVIE INC 44 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABBVIE INC 44 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 ABBVIE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABBVIE INC 44 has no effect on the direction of GE Aerospace i.e., GE Aerospace and ABBVIE go up and down completely randomly.
Pair Corralation between GE Aerospace and ABBVIE
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 2.64 times more return on investment than ABBVIE. However, GE Aerospace is 2.64 times more volatile than ABBVIE INC 44. It trades about 0.06 of its potential returns per unit of risk. ABBVIE INC 44 is currently generating about 0.04 per unit of risk. If you would invest 16,141 in GE Aerospace on September 5, 2024 and sell it today you would earn a total of 1,931 from holding GE Aerospace or generate 11.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.6% |
| Values | Daily Returns |
GE Aerospace vs. ABBVIE INC 44
Performance |
| Timeline |
| GE Aerospace |
| ABBVIE INC 44 |
GE Aerospace and ABBVIE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and ABBVIE
The main advantage of trading using opposite GE Aerospace and ABBVIE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, ABBVIE 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 ABBVIE will offset losses from the drop in ABBVIE's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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