Correlation Between GE Aerospace and 58013MER1
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By analyzing existing cross correlation between GE Aerospace and MCDONALDS P MEDIUM, you can compare the effects of market volatilities on GE Aerospace and 58013MER1 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 58013MER1. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and 58013MER1.
Diversification Opportunities for GE Aerospace and 58013MER1
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GE Aerospace and 58013MER1 is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and MCDONALDS P MEDIUM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCDONALDS P MEDIUM 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 58013MER1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCDONALDS P MEDIUM has no effect on the direction of GE Aerospace i.e., GE Aerospace and 58013MER1 go up and down completely randomly.
Pair Corralation between GE Aerospace and 58013MER1
Allowing for the 90-day total investment horizon GE Aerospace is expected to under-perform the 58013MER1. In addition to that, GE Aerospace is 1.16 times more volatile than MCDONALDS P MEDIUM. It trades about -0.23 of its total potential returns per unit of risk. MCDONALDS P MEDIUM is currently generating about 0.05 per unit of volatility. If you would invest 7,878 in MCDONALDS P MEDIUM on September 12, 2024 and sell it today you would earn a total of 94.00 from holding MCDONALDS P MEDIUM or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.36% |
| Values | Daily Returns |
GE Aerospace vs. MCDONALDS P MEDIUM
Performance |
| Timeline |
| GE Aerospace |
| MCDONALDS P MEDIUM |
GE Aerospace and 58013MER1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and 58013MER1
The main advantage of trading using opposite GE Aerospace and 58013MER1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, 58013MER1 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 58013MER1 will offset losses from the drop in 58013MER1's long position.| GE Aerospace vs. Victory Integrity Smallmid Cap | GE Aerospace vs. Hilton Worldwide Holdings | GE Aerospace vs. NVIDIA | GE Aerospace vs. JPMorgan Chase Co |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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