Correlation Between GE Aerospace and Yokogawa Electric
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Yokogawa Electric 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 Yokogawa Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Yokogawa Electric Corp, you can compare the effects of market volatilities on GE Aerospace and Yokogawa Electric 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 Yokogawa Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Yokogawa Electric.
Diversification Opportunities for GE Aerospace and Yokogawa Electric
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between GE Aerospace and Yokogawa is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Yokogawa Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yokogawa Electric Corp 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 Yokogawa Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yokogawa Electric Corp has no effect on the direction of GE Aerospace i.e., GE Aerospace and Yokogawa Electric go up and down completely randomly.
Pair Corralation between GE Aerospace and Yokogawa Electric
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 0.66 times more return on investment than Yokogawa Electric. However, GE Aerospace is 1.52 times less risky than Yokogawa Electric. It trades about 0.06 of its potential returns per unit of risk. Yokogawa Electric Corp is currently generating about 0.01 per unit of risk. If you would invest 15,575 in GE Aerospace on September 3, 2024 and sell it today you would earn a total of 2,641 from holding GE Aerospace or generate 16.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Aerospace vs. Yokogawa Electric Corp
Performance |
| Timeline |
| GE Aerospace |
| Yokogawa Electric Corp |
GE Aerospace and Yokogawa Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Yokogawa Electric
The main advantage of trading using opposite GE Aerospace and Yokogawa Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Yokogawa Electric 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 Yokogawa Electric will offset losses from the drop in Yokogawa Electric's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| Yokogawa Electric vs. Brewbilt Manufacturing | Yokogawa Electric vs. Eaton PLC | Yokogawa Electric vs. ITM Power Plc | Yokogawa Electric vs. Schneider Electric SA |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |