Correlation Between GE Aerospace and NEWFIELD
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By analyzing existing cross correlation between GE Aerospace and NEWFIELD EXPL 5375, you can compare the effects of market volatilities on GE Aerospace and NEWFIELD 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 NEWFIELD. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and NEWFIELD.
Diversification Opportunities for GE Aerospace and NEWFIELD
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between GE Aerospace and NEWFIELD is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and NEWFIELD EXPL 5375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWFIELD EXPL 5375 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 NEWFIELD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWFIELD EXPL 5375 has no effect on the direction of GE Aerospace i.e., GE Aerospace and NEWFIELD go up and down completely randomly.
Pair Corralation between GE Aerospace and NEWFIELD
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 8.72 times more return on investment than NEWFIELD. However, GE Aerospace is 8.72 times more volatile than NEWFIELD EXPL 5375. It trades about 0.01 of its potential returns per unit of risk. NEWFIELD EXPL 5375 is currently generating about 0.0 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 | Insignificant |
| Accuracy | 87.5% |
| Values | Daily Returns |
GE Aerospace vs. NEWFIELD EXPL 5375
Performance |
| Timeline |
| GE Aerospace |
| NEWFIELD EXPL 5375 |
GE Aerospace and NEWFIELD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and NEWFIELD
The main advantage of trading using opposite GE Aerospace and NEWFIELD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, NEWFIELD 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 NEWFIELD will offset losses from the drop in NEWFIELD's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| NEWFIELD vs. Vindicator Silver Lead Mining | NEWFIELD vs. Magna International | NEWFIELD vs. Visteon Corp | NEWFIELD vs. Evolution Mining |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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