Correlation Between GE Aerospace and Zinzino AB
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Zinzino AB 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 Zinzino AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Zinzino AB, you can compare the effects of market volatilities on GE Aerospace and Zinzino AB 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 Zinzino AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Zinzino AB.
Diversification Opportunities for GE Aerospace and Zinzino AB
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GE Aerospace and Zinzino is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Zinzino AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinzino AB 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 Zinzino AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinzino AB has no effect on the direction of GE Aerospace i.e., GE Aerospace and Zinzino AB go up and down completely randomly.
Pair Corralation between GE Aerospace and Zinzino AB
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 0.53 times more return on investment than Zinzino AB. However, GE Aerospace is 1.87 times less risky than Zinzino AB. It trades about 0.19 of its potential returns per unit of risk. Zinzino AB is currently generating about -0.16 per unit of risk. If you would invest 17,178 in GE Aerospace on September 1, 2024 and sell it today you would earn a total of 1,038 from holding GE Aerospace or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GE Aerospace vs. Zinzino AB
Performance |
| Timeline |
| GE Aerospace |
| Zinzino AB |
GE Aerospace and Zinzino AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Zinzino AB
The main advantage of trading using opposite GE Aerospace and Zinzino AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Zinzino AB 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 Zinzino AB will offset losses from the drop in Zinzino AB's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| Zinzino AB vs. Legacy Education | Zinzino AB vs. Apple Inc | Zinzino AB vs. NVIDIA | Zinzino AB vs. Microsoft |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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