Correlation Between GE Aerospace and JOHNSON
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By analyzing existing cross correlation between GE Aerospace and JOHNSON JOHNSON, you can compare the effects of market volatilities on GE Aerospace and JOHNSON 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 JOHNSON. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and JOHNSON.
Diversification Opportunities for GE Aerospace and JOHNSON
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GE Aerospace and JOHNSON is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and JOHNSON JOHNSON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JOHNSON JOHNSON 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 JOHNSON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JOHNSON JOHNSON has no effect on the direction of GE Aerospace i.e., GE Aerospace and JOHNSON go up and down completely randomly.
Pair Corralation between GE Aerospace and JOHNSON
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 1.42 times more return on investment than JOHNSON. However, GE Aerospace is 1.42 times more volatile than JOHNSON JOHNSON. It trades about 0.14 of its potential returns per unit of risk. JOHNSON JOHNSON is currently generating about -0.01 per unit of risk. If you would invest 9,722 in GE Aerospace on August 27, 2024 and sell it today you would earn a total of 8,393 from holding GE Aerospace or generate 86.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
GE Aerospace vs. JOHNSON JOHNSON
Performance |
| Timeline |
| GE Aerospace |
| JOHNSON JOHNSON |
GE Aerospace and JOHNSON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and JOHNSON
The main advantage of trading using opposite GE Aerospace and JOHNSON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, JOHNSON 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 JOHNSON will offset losses from the drop in JOHNSON's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| JOHNSON vs. SunLink Health Systems | JOHNSON vs. Western Acquisition Ventures | JOHNSON vs. Waters | JOHNSON vs. Electrovaya Common Shares |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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