Correlation Between GE Aerospace and KRAFT
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By analyzing existing cross correlation between GE Aerospace and KRAFT FOODS GROUP, you can compare the effects of market volatilities on GE Aerospace and KRAFT 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 KRAFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and KRAFT.
Diversification Opportunities for GE Aerospace and KRAFT
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GE Aerospace and KRAFT is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and KRAFT FOODS GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRAFT FOODS GROUP 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 KRAFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRAFT FOODS GROUP has no effect on the direction of GE Aerospace i.e., GE Aerospace and KRAFT go up and down completely randomly.
Pair Corralation between GE Aerospace and KRAFT
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 1.82 times more return on investment than KRAFT. However, GE Aerospace is 1.82 times more volatile than KRAFT FOODS GROUP. It trades about 0.01 of its potential returns per unit of risk. KRAFT FOODS GROUP is currently generating about -0.07 per unit of risk. If you would invest 16,945 in GE Aerospace on September 12, 2024 and sell it today you would lose (53.00) from holding GE Aerospace or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.06% |
| Values | Daily Returns |
GE Aerospace vs. KRAFT FOODS GROUP
Performance |
| Timeline |
| GE Aerospace |
| KRAFT FOODS GROUP |
GE Aerospace and KRAFT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and KRAFT
The main advantage of trading using opposite GE Aerospace and KRAFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, KRAFT 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 KRAFT will offset losses from the drop in KRAFT's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| KRAFT vs. Church Dwight | KRAFT vs. RBC Bearings Incorporated | KRAFT vs. Meiwu Technology Co | KRAFT vs. National Vision Holdings |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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