Correlation Between GE Aerospace and 594918AU8
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By analyzing existing cross correlation between GE Aerospace and MICROSOFT P 375, you can compare the effects of market volatilities on GE Aerospace and 594918AU8 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 594918AU8. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and 594918AU8.
Diversification Opportunities for GE Aerospace and 594918AU8
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GE Aerospace and 594918AU8 is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and MICROSOFT P 375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICROSOFT P 375 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 594918AU8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICROSOFT P 375 has no effect on the direction of GE Aerospace i.e., GE Aerospace and 594918AU8 go up and down completely randomly.
Pair Corralation between GE Aerospace and 594918AU8
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 0.67 times more return on investment than 594918AU8. However, GE Aerospace is 1.49 times less risky than 594918AU8. It trades about 0.03 of its potential returns per unit of risk. MICROSOFT P 375 is currently generating about 0.0 per unit of risk. If you would invest 17,974 in GE Aerospace on August 25, 2024 and sell it today you would earn a total of 141.00 from holding GE Aerospace or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 63.64% |
| Values | Daily Returns |
GE Aerospace vs. MICROSOFT P 375
Performance |
| Timeline |
| GE Aerospace |
| MICROSOFT P 375 |
GE Aerospace and 594918AU8 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and 594918AU8
The main advantage of trading using opposite GE Aerospace and 594918AU8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, 594918AU8 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 594918AU8 will offset losses from the drop in 594918AU8's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| 594918AU8 vs. The Coca Cola | 594918AU8 vs. JPMorgan Chase Co | 594918AU8 vs. Dupont De Nemours | 594918AU8 vs. Alcoa Corp |
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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