Correlation Between TECO 2030 and GE Aerospace
Can any of the company-specific risk be diversified away by investing in both TECO 2030 and GE Aerospace 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 TECO 2030 and GE Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TECO 2030 ASA and GE Aerospace, you can compare the effects of market volatilities on TECO 2030 and GE Aerospace 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 TECO 2030 with a short position of GE Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of TECO 2030 and GE Aerospace.
Diversification Opportunities for TECO 2030 and GE Aerospace
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between TECO and GE Aerospace is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding TECO 2030 ASA and GE Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Aerospace and TECO 2030 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 TECO 2030 ASA are associated (or correlated) with GE Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE Aerospace has no effect on the direction of TECO 2030 i.e., TECO 2030 and GE Aerospace go up and down completely randomly.
Pair Corralation between TECO 2030 and GE Aerospace
Assuming the 90 days horizon TECO 2030 ASA is expected to under-perform the GE Aerospace. In addition to that, TECO 2030 is 10.6 times more volatile than GE Aerospace. It trades about -0.26 of its total potential returns per unit of risk. GE Aerospace is currently generating about 0.19 per unit of volatility. If you would invest 17,176 in GE Aerospace on September 3, 2024 and sell it today you would earn a total of 1,040 from holding GE Aerospace or generate 6.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
TECO 2030 ASA vs. GE Aerospace
Performance |
| Timeline |
| TECO 2030 ASA |
| GE Aerospace |
TECO 2030 and GE Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TECO 2030 and GE Aerospace
The main advantage of trading using opposite TECO 2030 and GE Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TECO 2030 position performs unexpectedly, GE Aerospace 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 GE Aerospace will offset losses from the drop in GE Aerospace's long position.| TECO 2030 vs. Dear Cashmere Holding | TECO 2030 vs. Goff Corp | TECO 2030 vs. Wialan Technologies | TECO 2030 vs. Cgrowth Capital |
| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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