Correlation Between GE Aerospace and 55336VAM2
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By analyzing existing cross correlation between GE Aerospace and MPLX LP 45, you can compare the effects of market volatilities on GE Aerospace and 55336VAM2 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 55336VAM2. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and 55336VAM2.
Diversification Opportunities for GE Aerospace and 55336VAM2
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GE Aerospace and 55336VAM2 is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and MPLX LP 45 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPLX LP 45 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 55336VAM2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPLX LP 45 has no effect on the direction of GE Aerospace i.e., GE Aerospace and 55336VAM2 go up and down completely randomly.
Pair Corralation between GE Aerospace and 55336VAM2
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 2.15 times more return on investment than 55336VAM2. However, GE Aerospace is 2.15 times more volatile than MPLX LP 45. It trades about 0.16 of its potential returns per unit of risk. MPLX LP 45 is currently generating about 0.0 per unit of risk. If you would invest 5,118 in GE Aerospace on September 3, 2024 and sell it today you would earn a total of 13,098 from holding GE Aerospace or generate 255.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.18% |
| Values | Daily Returns |
GE Aerospace vs. MPLX LP 45
Performance |
| Timeline |
| GE Aerospace |
| MPLX LP 45 |
GE Aerospace and 55336VAM2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and 55336VAM2
The main advantage of trading using opposite GE Aerospace and 55336VAM2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, 55336VAM2 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 55336VAM2 will offset losses from the drop in 55336VAM2's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| 55336VAM2 vs. Tandy Leather Factory | 55336VAM2 vs. American Eagle Outfitters | 55336VAM2 vs. Ross Stores | 55336VAM2 vs. United Parks Resorts |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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