Correlation Between ENTERPRISE and GE Aerospace
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By analyzing existing cross correlation between ENTERPRISE PRODUCTS OPERATING and GE Aerospace, you can compare the effects of market volatilities on ENTERPRISE 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 ENTERPRISE with a short position of GE Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENTERPRISE and GE Aerospace.
Diversification Opportunities for ENTERPRISE and GE Aerospace
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between ENTERPRISE and GE Aerospace is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding ENTERPRISE PRODUCTS OPERATING and GE Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Aerospace and ENTERPRISE 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 ENTERPRISE PRODUCTS OPERATING 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 ENTERPRISE i.e., ENTERPRISE and GE Aerospace go up and down completely randomly.
Pair Corralation between ENTERPRISE and GE Aerospace
Assuming the 90 days trading horizon ENTERPRISE PRODUCTS OPERATING is expected to under-perform the GE Aerospace. But the bond apears to be less risky and, when comparing its historical volatility, ENTERPRISE PRODUCTS OPERATING is 3.1 times less risky than GE Aerospace. The bond trades about -0.01 of its potential returns per unit of risk. The GE Aerospace is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 5,118 in GE Aerospace on September 3, 2024 and sell it today you would earn a total of 12,926 from holding GE Aerospace or generate 252.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
ENTERPRISE PRODUCTS OPERATING vs. GE Aerospace
Performance |
| Timeline |
| ENTERPRISE PRODUCTS |
| GE Aerospace |
ENTERPRISE and GE Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENTERPRISE and GE Aerospace
The main advantage of trading using opposite ENTERPRISE and GE Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENTERPRISE 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.| ENTERPRISE vs. The Travelers Companies | ENTERPRISE vs. GE Aerospace | ENTERPRISE vs. Walmart | ENTERPRISE vs. Pfizer Inc |
| 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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