Correlation Between GE Aerospace and Vivendi SA
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Vivendi SA 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 Vivendi SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Vivendi SA, you can compare the effects of market volatilities on GE Aerospace and Vivendi SA 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 Vivendi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Vivendi SA.
Diversification Opportunities for GE Aerospace and Vivendi SA
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GE Aerospace and Vivendi is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Vivendi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi SA 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 Vivendi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SA has no effect on the direction of GE Aerospace i.e., GE Aerospace and Vivendi SA go up and down completely randomly.
Pair Corralation between GE Aerospace and Vivendi SA
If you would invest 17,196 in GE Aerospace on November 4, 2024 and sell it today you would earn a total of 3,161 from holding GE Aerospace or generate 18.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
GE Aerospace vs. Vivendi SA
Performance |
| Timeline |
| GE Aerospace |
| Vivendi SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GE Aerospace and Vivendi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Vivendi SA
The main advantage of trading using opposite GE Aerospace and Vivendi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Vivendi SA 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 Vivendi SA will offset losses from the drop in Vivendi SA's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| Vivendi SA vs. Universal Music Group | Vivendi SA vs. Reservoir Media | Vivendi SA vs. Atlanta Braves Holdings, | Vivendi SA vs. Warner Music Group |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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