Correlation Between GE Aerospace and GENERAL
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By analyzing existing cross correlation between GE Aerospace and GENERAL DYNAMICS P, you can compare the effects of market volatilities on GE Aerospace and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and GENERAL.
Diversification Opportunities for GE Aerospace and GENERAL
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GE Aerospace and GENERAL is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and GENERAL DYNAMICS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL DYNAMICS P 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL DYNAMICS P has no effect on the direction of GE Aerospace i.e., GE Aerospace and GENERAL go up and down completely randomly.
Pair Corralation between GE Aerospace and GENERAL
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 4.66 times more return on investment than GENERAL. However, GE Aerospace is 4.66 times more volatile than GENERAL DYNAMICS P. It trades about 0.15 of its potential returns per unit of risk. GENERAL DYNAMICS P is currently generating about 0.0 per unit of risk. If you would invest 9,482 in GE Aerospace on September 2, 2024 and sell it today you would earn a total of 8,734 from holding GE Aerospace or generate 92.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.37% |
| Values | Daily Returns |
GE Aerospace vs. GENERAL DYNAMICS P
Performance |
| Timeline |
| GE Aerospace |
| GENERAL DYNAMICS P |
GE Aerospace and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and GENERAL
The main advantage of trading using opposite GE Aerospace and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| GENERAL vs. East Africa Metals | GENERAL vs. Cadence Design Systems | GENERAL vs. Barrick Gold Corp | GENERAL vs. Asure Software |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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