Correlation Between GE Aerospace and PRAXAIR
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By analyzing existing cross correlation between GE Aerospace and PRAXAIR INC 355, you can compare the effects of market volatilities on GE Aerospace and PRAXAIR 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 PRAXAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and PRAXAIR.
Diversification Opportunities for GE Aerospace and PRAXAIR
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GE Aerospace and PRAXAIR is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and PRAXAIR INC 355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRAXAIR INC 355 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 PRAXAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRAXAIR INC 355 has no effect on the direction of GE Aerospace i.e., GE Aerospace and PRAXAIR go up and down completely randomly.
Pair Corralation between GE Aerospace and PRAXAIR
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 53.46 times less return on investment than PRAXAIR. But when comparing it to its historical volatility, GE Aerospace is 73.2 times less risky than PRAXAIR. It trades about 0.16 of its potential returns per unit of risk. PRAXAIR INC 355 is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 8,514 in PRAXAIR INC 355 on August 28, 2024 and sell it today you would lose (523.00) from holding PRAXAIR INC 355 or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 37.9% |
| Values | Daily Returns |
GE Aerospace vs. PRAXAIR INC 355
Performance |
| Timeline |
| GE Aerospace |
| PRAXAIR INC 355 |
GE Aerospace and PRAXAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and PRAXAIR
The main advantage of trading using opposite GE Aerospace and PRAXAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, PRAXAIR 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 PRAXAIR will offset losses from the drop in PRAXAIR's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| PRAXAIR vs. The Coca Cola | PRAXAIR vs. JPMorgan Chase Co | PRAXAIR vs. Dupont De Nemours | PRAXAIR vs. Alcoa Corp |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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