Correlation Between GE Aerospace and Reynolds
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By analyzing existing cross correlation between GE Aerospace and Reynolds American 725, you can compare the effects of market volatilities on GE Aerospace and Reynolds 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 Reynolds. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Reynolds.
Diversification Opportunities for GE Aerospace and Reynolds
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between GE Aerospace and Reynolds is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Reynolds American 725 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reynolds American 725 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 Reynolds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reynolds American 725 has no effect on the direction of GE Aerospace i.e., GE Aerospace and Reynolds go up and down completely randomly.
Pair Corralation between GE Aerospace and Reynolds
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 1.78 times more return on investment than Reynolds. However, GE Aerospace is 1.78 times more volatile than Reynolds American 725. It trades about 0.12 of its potential returns per unit of risk. Reynolds American 725 is currently generating about 0.01 per unit of risk. If you would invest 9,813 in GE Aerospace on September 12, 2024 and sell it today you would earn a total of 7,050 from holding GE Aerospace or generate 71.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.94% |
| Values | Daily Returns |
GE Aerospace vs. Reynolds American 725
Performance |
| Timeline |
| GE Aerospace |
| Reynolds American 725 |
GE Aerospace and Reynolds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Reynolds
The main advantage of trading using opposite GE Aerospace and Reynolds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Reynolds 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 Reynolds will offset losses from the drop in Reynolds' long position.| GE Aerospace vs. Victory Integrity Smallmid Cap | GE Aerospace vs. Hilton Worldwide Holdings | GE Aerospace vs. NVIDIA | GE Aerospace vs. JPMorgan Chase Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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