Correlation Between GE Aerospace and PHILIP
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By analyzing existing cross correlation between GE Aerospace and PHILIP MORRIS INTL, you can compare the effects of market volatilities on GE Aerospace and PHILIP 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 PHILIP. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and PHILIP.
Diversification Opportunities for GE Aerospace and PHILIP
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between GE Aerospace and PHILIP is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and PHILIP MORRIS INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHILIP MORRIS INTL 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 PHILIP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHILIP MORRIS INTL has no effect on the direction of GE Aerospace i.e., GE Aerospace and PHILIP go up and down completely randomly.
Pair Corralation between GE Aerospace and PHILIP
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 4.91 times more return on investment than PHILIP. However, GE Aerospace is 4.91 times more volatile than PHILIP MORRIS INTL. It trades about 0.19 of its potential returns per unit of risk. PHILIP MORRIS INTL is currently generating about 0.27 per unit of risk. If you would invest 17,176 in GE Aerospace on September 5, 2024 and sell it today you would earn a total of 1,089 from holding GE Aerospace or generate 6.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
GE Aerospace vs. PHILIP MORRIS INTL
Performance |
| Timeline |
| GE Aerospace |
| PHILIP MORRIS INTL |
GE Aerospace and PHILIP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and PHILIP
The main advantage of trading using opposite GE Aerospace and PHILIP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, PHILIP 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 PHILIP will offset losses from the drop in PHILIP'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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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