Correlation Between GE Aerospace and ECOLAB
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By analyzing existing cross correlation between GE Aerospace and ECOLAB INC 325, you can compare the effects of market volatilities on GE Aerospace and ECOLAB 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 ECOLAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and ECOLAB.
Diversification Opportunities for GE Aerospace and ECOLAB
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GE Aerospace and ECOLAB is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and ECOLAB INC 325 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECOLAB INC 325 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 ECOLAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECOLAB INC 325 has no effect on the direction of GE Aerospace i.e., GE Aerospace and ECOLAB go up and down completely randomly.
Pair Corralation between GE Aerospace and ECOLAB
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 13.38 times less return on investment than ECOLAB. But when comparing it to its historical volatility, GE Aerospace is 33.06 times less risky than ECOLAB. It trades about 0.13 of its potential returns per unit of risk. ECOLAB INC 325 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,499 in ECOLAB INC 325 on September 1, 2024 and sell it today you would earn a total of 59.00 from holding ECOLAB INC 325 or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 81.18% |
| Values | Daily Returns |
GE Aerospace vs. ECOLAB INC 325
Performance |
| Timeline |
| GE Aerospace |
| ECOLAB INC 325 |
GE Aerospace and ECOLAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and ECOLAB
The main advantage of trading using opposite GE Aerospace and ECOLAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, ECOLAB 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 ECOLAB will offset losses from the drop in ECOLAB's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| ECOLAB vs. Fast Retailing Co | ECOLAB vs. Maanshan Iron Steel | ECOLAB vs. Insteel Industries | ECOLAB vs. Summit Environmental |
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 CEOs Directory module to screen CEOs from public companies around the world.
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