Correlation Between GE Aerospace and AMGEN
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By analyzing existing cross correlation between GE Aerospace and AMGEN INC, you can compare the effects of market volatilities on GE Aerospace and AMGEN 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 AMGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and AMGEN.
Diversification Opportunities for GE Aerospace and AMGEN
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between GE Aerospace and AMGEN is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and AMGEN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMGEN INC 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 AMGEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMGEN INC has no effect on the direction of GE Aerospace i.e., GE Aerospace and AMGEN go up and down completely randomly.
Pair Corralation between GE Aerospace and AMGEN
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 1.37 times more return on investment than AMGEN. However, GE Aerospace is 1.37 times more volatile than AMGEN INC. It trades about 0.19 of its potential returns per unit of risk. AMGEN INC is currently generating about -0.22 per unit of risk. If you would invest 17,178 in GE Aerospace on September 1, 2024 and sell it today you would earn a total of 1,038 from holding GE Aerospace or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
GE Aerospace vs. AMGEN INC
Performance |
| Timeline |
| GE Aerospace |
| AMGEN INC |
GE Aerospace and AMGEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and AMGEN
The main advantage of trading using opposite GE Aerospace and AMGEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, AMGEN 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 AMGEN will offset losses from the drop in AMGEN'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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