Correlation Between GE Aerospace and Targa
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By analyzing existing cross correlation between GE Aerospace and Targa Resources Partners, you can compare the effects of market volatilities on GE Aerospace and Targa 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 Targa. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Targa.
Diversification Opportunities for GE Aerospace and Targa
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between GE Aerospace and Targa is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Targa Resources Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Targa Resources Partners 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 Targa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Targa Resources Partners has no effect on the direction of GE Aerospace i.e., GE Aerospace and Targa go up and down completely randomly.
Pair Corralation between GE Aerospace and Targa
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 7.31 times more return on investment than Targa. However, GE Aerospace is 7.31 times more volatile than Targa Resources Partners. It trades about 0.19 of its potential returns per unit of risk. Targa Resources Partners is currently generating about 0.17 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. Targa Resources Partners
Performance |
| Timeline |
| GE Aerospace |
| Targa Resources Partners |
GE Aerospace and Targa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Targa
The main advantage of trading using opposite GE Aerospace and Targa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Targa 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 Targa will offset losses from the drop in Targa'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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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