Correlation Between GE Aerospace and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Wells Fargo 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 Wells Fargo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Wells Fargo Servative, you can compare the effects of market volatilities on GE Aerospace and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Wells Fargo.
Diversification Opportunities for GE Aerospace and Wells Fargo
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between GE Aerospace and Wells is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Wells Fargo Servative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Servative 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Servative has no effect on the direction of GE Aerospace i.e., GE Aerospace and Wells Fargo go up and down completely randomly.
Pair Corralation between GE Aerospace and Wells Fargo
If you would invest 16,859 in GE Aerospace on November 3, 2024 and sell it today you would earn a total of 3,498 from holding GE Aerospace or generate 20.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
GE Aerospace vs. Wells Fargo Servative
Performance |
| Timeline |
| GE Aerospace |
| Wells Fargo Servative |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GE Aerospace and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Wells Fargo
The main advantage of trading using opposite GE Aerospace and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo'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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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