Correlation Between GE Aerospace and VERIZON
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By analyzing existing cross correlation between GE Aerospace and VERIZON MUNICATIONS INC, you can compare the effects of market volatilities on GE Aerospace and VERIZON 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 VERIZON. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and VERIZON.
Diversification Opportunities for GE Aerospace and VERIZON
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between GE Aerospace and VERIZON is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and VERIZON MUNICATIONS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VERIZON MUNICATIONS INC 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 VERIZON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VERIZON MUNICATIONS INC has no effect on the direction of GE Aerospace i.e., GE Aerospace and VERIZON go up and down completely randomly.
Pair Corralation between GE Aerospace and VERIZON
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 2.14 times more return on investment than VERIZON. However, GE Aerospace is 2.14 times more volatile than VERIZON MUNICATIONS INC. It trades about 0.06 of its potential returns per unit of risk. VERIZON MUNICATIONS INC is currently generating about 0.01 per unit of risk. If you would invest 16,204 in GE Aerospace on September 3, 2024 and sell it today you would earn a total of 2,012 from holding GE Aerospace or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.0% |
| Values | Daily Returns |
GE Aerospace vs. VERIZON MUNICATIONS INC
Performance |
| Timeline |
| GE Aerospace |
| VERIZON MUNICATIONS INC |
GE Aerospace and VERIZON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and VERIZON
The main advantage of trading using opposite GE Aerospace and VERIZON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, VERIZON 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 VERIZON will offset losses from the drop in VERIZON's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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