Correlation Between GE Aerospace and DEERE
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By analyzing existing cross correlation between GE Aerospace and DEERE 655 percent, you can compare the effects of market volatilities on GE Aerospace and DEERE 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 DEERE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and DEERE.
Diversification Opportunities for GE Aerospace and DEERE
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GE Aerospace and DEERE is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and DEERE 655 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEERE 655 percent 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 DEERE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEERE 655 percent has no effect on the direction of GE Aerospace i.e., GE Aerospace and DEERE go up and down completely randomly.
Pair Corralation between GE Aerospace and DEERE
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 3.16 times more return on investment than DEERE. However, GE Aerospace is 3.16 times more volatile than DEERE 655 percent. It trades about 0.05 of its potential returns per unit of risk. DEERE 655 percent is currently generating about 0.05 per unit of risk. If you would invest 16,204 in GE Aerospace on September 3, 2024 and sell it today you would earn a total of 1,840 from holding GE Aerospace or generate 11.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 83.2% |
| Values | Daily Returns |
GE Aerospace vs. DEERE 655 percent
Performance |
| Timeline |
| GE Aerospace |
| DEERE 655 percent |
GE Aerospace and DEERE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and DEERE
The main advantage of trading using opposite GE Aerospace and DEERE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, DEERE 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 DEERE will offset losses from the drop in DEERE'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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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