Correlation Between GE Aerospace and TELEFONICA
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By analyzing existing cross correlation between GE Aerospace and TELEFONICA EMISIONES S, you can compare the effects of market volatilities on GE Aerospace and TELEFONICA 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 TELEFONICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and TELEFONICA.
Diversification Opportunities for GE Aerospace and TELEFONICA
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between GE Aerospace and TELEFONICA is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and TELEFONICA EMISIONES S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELEFONICA EMISIONES 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 TELEFONICA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELEFONICA EMISIONES has no effect on the direction of GE Aerospace i.e., GE Aerospace and TELEFONICA go up and down completely randomly.
Pair Corralation between GE Aerospace and TELEFONICA
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 2.36 times more return on investment than TELEFONICA. However, GE Aerospace is 2.36 times more volatile than TELEFONICA EMISIONES S. It trades about 0.11 of its potential returns per unit of risk. TELEFONICA EMISIONES S is currently generating about -0.22 per unit of risk. If you would invest 17,464 in GE Aerospace on August 31, 2024 and sell it today you would earn a total of 596.00 from holding GE Aerospace or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
GE Aerospace vs. TELEFONICA EMISIONES S
Performance |
| Timeline |
| GE Aerospace |
| TELEFONICA EMISIONES |
GE Aerospace and TELEFONICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and TELEFONICA
The main advantage of trading using opposite GE Aerospace and TELEFONICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, TELEFONICA 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 TELEFONICA will offset losses from the drop in TELEFONICA's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| TELEFONICA vs. AEP TEX INC | TELEFONICA vs. US BANK NATIONAL | TELEFONICA vs. Bank of America | TELEFONICA 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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