Correlation Between GE Aerospace and NORTHROP
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By analyzing existing cross correlation between GE Aerospace and NORTHROP GRUMMAN P, you can compare the effects of market volatilities on GE Aerospace and NORTHROP 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 NORTHROP. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and NORTHROP.
Diversification Opportunities for GE Aerospace and NORTHROP
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GE Aerospace and NORTHROP is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and NORTHROP GRUMMAN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHROP GRUMMAN P 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 NORTHROP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHROP GRUMMAN P has no effect on the direction of GE Aerospace i.e., GE Aerospace and NORTHROP go up and down completely randomly.
Pair Corralation between GE Aerospace and NORTHROP
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 2.05 times more return on investment than NORTHROP. However, GE Aerospace is 2.05 times more volatile than NORTHROP GRUMMAN P. It trades about 0.15 of its potential returns per unit of risk. NORTHROP GRUMMAN P is currently generating about 0.0 per unit of risk. If you would invest 9,546 in GE Aerospace on September 4, 2024 and sell it today you would earn a total of 8,526 from holding GE Aerospace or generate 89.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.88% |
| Values | Daily Returns |
GE Aerospace vs. NORTHROP GRUMMAN P
Performance |
| Timeline |
| GE Aerospace |
| NORTHROP GRUMMAN P |
GE Aerospace and NORTHROP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and NORTHROP
The main advantage of trading using opposite GE Aerospace and NORTHROP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, NORTHROP 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 NORTHROP will offset losses from the drop in NORTHROP's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| NORTHROP vs. Transportadora de Gas | NORTHROP vs. Paysafe | NORTHROP vs. Suburban Propane Partners | NORTHROP vs. Aris Water Solutions |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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