Correlation Between GE Aerospace and Newell
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By analyzing existing cross correlation between GE Aerospace and Newell Brands 42, you can compare the effects of market volatilities on GE Aerospace and Newell 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 Newell. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Newell.
Diversification Opportunities for GE Aerospace and Newell
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between GE Aerospace and Newell is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Newell Brands 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newell Brands 42 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 Newell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newell Brands 42 has no effect on the direction of GE Aerospace i.e., GE Aerospace and Newell go up and down completely randomly.
Pair Corralation between GE Aerospace and Newell
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 4.39 times more return on investment than Newell. However, GE Aerospace is 4.39 times more volatile than Newell Brands 42. It trades about 0.15 of its potential returns per unit of risk. Newell Brands 42 is currently generating about 0.03 per unit of risk. If you would invest 9,571 in GE Aerospace on September 3, 2024 and sell it today you would earn a total of 8,473 from holding GE Aerospace or generate 88.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
GE Aerospace vs. Newell Brands 42
Performance |
| Timeline |
| GE Aerospace |
| Newell Brands 42 |
GE Aerospace and Newell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Newell
The main advantage of trading using opposite GE Aerospace and Newell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Newell 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 Newell will offset losses from the drop in Newell's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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