Correlation Between GE Aerospace and GENERAL
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By analyzing existing cross correlation between GE Aerospace and GENERAL MLS INC, 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
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GE Aerospace and GENERAL is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and GENERAL MLS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL MLS 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 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 MLS INC 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 2.06 times less return on investment than GENERAL. But when comparing it to its historical volatility, GE Aerospace is 1.22 times less risky than GENERAL. It trades about 0.13 of its potential returns per unit of risk. GENERAL MLS INC is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 9,145 in GENERAL MLS INC on August 31, 2024 and sell it today you would earn a total of 323.00 from holding GENERAL MLS INC or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 39.13% |
| Values | Daily Returns |
GE Aerospace vs. GENERAL MLS INC
Performance |
| Timeline |
| GE Aerospace |
| GENERAL MLS INC |
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. AEP TEX INC | GENERAL vs. US BANK NATIONAL | GENERAL vs. Bank of America | GENERAL vs. GE Aerospace |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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