Correlation Between GE Aerospace and WALMART

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Can any of the company-specific risk be diversified away by investing in both GE Aerospace and WALMART at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GE Aerospace and WALMART into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and WALMART INC, you can compare the effects of market volatilities on GE Aerospace and WALMART 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 WALMART. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and WALMART.

Diversification Opportunities for GE Aerospace and WALMART

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between GE Aerospace and WALMART is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and WALMART INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WALMART 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 WALMART. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WALMART INC has no effect on the direction of GE Aerospace i.e., GE Aerospace and WALMART go up and down completely randomly.

Pair Corralation between GE Aerospace and WALMART

Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 1.96 times more return on investment than WALMART. However, GE Aerospace is 1.96 times more volatile than WALMART INC. It trades about 0.18 of its potential returns per unit of risk. WALMART INC is currently generating about -0.05 per unit of risk. If you would invest  25,701  in GE Aerospace on April 29, 2025 and sell it today you would earn a total of  1,360  from holding GE Aerospace or generate 5.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.24%
ValuesDaily Returns

GE Aerospace  vs.  WALMART INC

 Performance 
       Timeline  
GE Aerospace 

Risk-Adjusted Performance

Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in GE Aerospace are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, GE Aerospace exhibited solid returns over the last few months and may actually be approaching a breakup point.
WALMART INC 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days WALMART INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, WALMART is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GE Aerospace and WALMART Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GE Aerospace and WALMART

The main advantage of trading using opposite GE Aerospace and WALMART positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, WALMART 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 WALMART will offset losses from the drop in WALMART's long position.
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The idea behind GE Aerospace and WALMART INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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