Correlation Between GE Aerospace and PEPSICO
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By analyzing existing cross correlation between GE Aerospace and PEPSICO INC 3, you can compare the effects of market volatilities on GE Aerospace and PEPSICO 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 PEPSICO. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and PEPSICO.
Diversification Opportunities for GE Aerospace and PEPSICO
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between GE Aerospace and PEPSICO is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and PEPSICO INC 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPSICO INC 3 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 PEPSICO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPSICO INC 3 has no effect on the direction of GE Aerospace i.e., GE Aerospace and PEPSICO go up and down completely randomly.
Pair Corralation between GE Aerospace and PEPSICO
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 3.13 times more return on investment than PEPSICO. However, GE Aerospace is 3.13 times more volatile than PEPSICO INC 3. It trades about 0.19 of its potential returns per unit of risk. PEPSICO INC 3 is currently generating about -0.18 per unit of risk. If you would invest 17,170 in GE Aerospace on September 2, 2024 and sell it today you would earn a total of 1,046 from holding GE Aerospace or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Aerospace vs. PEPSICO INC 3
Performance |
| Timeline |
| GE Aerospace |
| PEPSICO INC 3 |
GE Aerospace and PEPSICO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and PEPSICO
The main advantage of trading using opposite GE Aerospace and PEPSICO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, PEPSICO 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 PEPSICO will offset losses from the drop in PEPSICO's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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