Correlation Between GE Aerospace and Windtree Therapeutics
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Windtree Therapeutics 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 Windtree Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Windtree Therapeutics, you can compare the effects of market volatilities on GE Aerospace and Windtree Therapeutics 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 Windtree Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Windtree Therapeutics.
Diversification Opportunities for GE Aerospace and Windtree Therapeutics
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GE Aerospace and Windtree is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Windtree Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Windtree Therapeutics 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 Windtree Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Windtree Therapeutics has no effect on the direction of GE Aerospace i.e., GE Aerospace and Windtree Therapeutics go up and down completely randomly.
Pair Corralation between GE Aerospace and Windtree Therapeutics
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 0.14 times more return on investment than Windtree Therapeutics. However, GE Aerospace is 7.21 times less risky than Windtree Therapeutics. It trades about 0.15 of its potential returns per unit of risk. Windtree Therapeutics is currently generating about -0.06 per unit of risk. If you would invest 9,667 in GE Aerospace on August 26, 2024 and sell it today you would earn a total of 8,448 from holding GE Aerospace or generate 87.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Aerospace vs. Windtree Therapeutics
Performance |
| Timeline |
| GE Aerospace |
| Windtree Therapeutics |
GE Aerospace and Windtree Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Windtree Therapeutics
The main advantage of trading using opposite GE Aerospace and Windtree Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Windtree Therapeutics 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 Windtree Therapeutics will offset losses from the drop in Windtree Therapeutics' long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| Windtree Therapeutics vs. Neurobo Pharmaceuticals | Windtree Therapeutics vs. Palisade Bio | Windtree Therapeutics vs. Lixte Biotechnology Holdings | Windtree Therapeutics vs. Avenue Therapeutics |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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