Correlation Between GE Aerospace and PRECISION
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By analyzing existing cross correlation between GE Aerospace and PRECISION CASTPARTS P, you can compare the effects of market volatilities on GE Aerospace and PRECISION 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 PRECISION. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and PRECISION.
Diversification Opportunities for GE Aerospace and PRECISION
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GE Aerospace and PRECISION is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and PRECISION CASTPARTS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRECISION CASTPARTS 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 PRECISION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRECISION CASTPARTS has no effect on the direction of GE Aerospace i.e., GE Aerospace and PRECISION go up and down completely randomly.
Pair Corralation between GE Aerospace and PRECISION
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 9.38 times more return on investment than PRECISION. However, GE Aerospace is 9.38 times more volatile than PRECISION CASTPARTS P. It trades about 0.15 of its potential returns per unit of risk. PRECISION CASTPARTS P is currently generating about 0.01 per unit of risk. If you would invest 9,482 in GE Aerospace on September 2, 2024 and sell it today you would earn a total of 8,734 from holding GE Aerospace or generate 92.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.37% |
| Values | Daily Returns |
GE Aerospace vs. PRECISION CASTPARTS P
Performance |
| Timeline |
| GE Aerospace |
| PRECISION CASTPARTS |
GE Aerospace and PRECISION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and PRECISION
The main advantage of trading using opposite GE Aerospace and PRECISION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, PRECISION 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 PRECISION will offset losses from the drop in PRECISION's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| PRECISION vs. AEP TEX INC | PRECISION vs. US BANK NATIONAL | PRECISION vs. Bank of America | PRECISION vs. GE Aerospace |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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