Correlation Between Ushio and GE Aerospace
Can any of the company-specific risk be diversified away by investing in both Ushio 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 Ushio and GE Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ushio Inc and GE Aerospace, you can compare the effects of market volatilities on Ushio 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 Ushio with a short position of GE Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ushio and GE Aerospace.
Diversification Opportunities for Ushio and GE Aerospace
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ushio and GE Aerospace is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ushio Inc and GE Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Aerospace and Ushio 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 Ushio Inc 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 Ushio i.e., Ushio and GE Aerospace go up and down completely randomly.
Pair Corralation between Ushio and GE Aerospace
Assuming the 90 days horizon Ushio is expected to generate 2.05 times less return on investment than GE Aerospace. In addition to that, Ushio is 1.12 times more volatile than GE Aerospace. It trades about 0.05 of its total potential returns per unit of risk. GE Aerospace is currently generating about 0.12 per unit of volatility. If you would invest 8,884 in GE Aerospace on September 12, 2024 and sell it today you would earn a total of 8,008 from holding GE Aerospace or generate 90.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 49.24% |
| Values | Daily Returns |
Ushio Inc vs. GE Aerospace
Performance |
| Timeline |
| Ushio Inc |
| GE Aerospace |
Ushio and GE Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ushio and GE Aerospace
The main advantage of trading using opposite Ushio and GE Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ushio 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.| Ushio vs. Xinjiang Goldwind Science | Ushio vs. American Superconductor | Ushio vs. Cummins | Ushio vs. Aquagold International |
| GE Aerospace vs. Victory Integrity Smallmid Cap | GE Aerospace vs. Hilton Worldwide Holdings | GE Aerospace vs. NVIDIA | GE Aerospace vs. JPMorgan Chase Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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