Correlation Between GE Aerospace and UNION
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By analyzing existing cross correlation between GE Aerospace and UNION ELEC 39, you can compare the effects of market volatilities on GE Aerospace and UNION 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 UNION. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and UNION.
Diversification Opportunities for GE Aerospace and UNION
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GE Aerospace and UNION is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and UNION ELEC 39 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNION ELEC 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 UNION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNION ELEC has no effect on the direction of GE Aerospace i.e., GE Aerospace and UNION go up and down completely randomly.
Pair Corralation between GE Aerospace and UNION
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 21.77 times less return on investment than UNION. But when comparing it to its historical volatility, GE Aerospace is 47.34 times less risky than UNION. It trades about 0.16 of its potential returns per unit of risk. UNION ELEC 39 is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,666 in UNION ELEC 39 on September 4, 2024 and sell it today you would earn a total of 70.00 from holding UNION ELEC 39 or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 61.21% |
| Values | Daily Returns |
GE Aerospace vs. UNION ELEC 39
Performance |
| Timeline |
| GE Aerospace |
| UNION ELEC |
GE Aerospace and UNION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and UNION
The main advantage of trading using opposite GE Aerospace and UNION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, UNION 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 UNION will offset losses from the drop in UNION's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| UNION vs. Space Communication | UNION vs. Playtika Holding Corp | UNION vs. Iridium Communications | UNION vs. Micron Technology |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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