Correlation Between GENERAL and Arrow Electronics
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By analyzing existing cross correlation between GENERAL DYNAMICS P and Arrow Electronics, you can compare the effects of market volatilities on GENERAL and Arrow Electronics 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 GENERAL with a short position of Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GENERAL and Arrow Electronics.
Diversification Opportunities for GENERAL and Arrow Electronics
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GENERAL and Arrow is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding GENERAL DYNAMICS P and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics and GENERAL 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 GENERAL DYNAMICS P are associated (or correlated) with Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of GENERAL i.e., GENERAL and Arrow Electronics go up and down completely randomly.
Pair Corralation between GENERAL and Arrow Electronics
Assuming the 90 days trading horizon GENERAL DYNAMICS P is expected to generate 0.12 times more return on investment than Arrow Electronics. However, GENERAL DYNAMICS P is 8.04 times less risky than Arrow Electronics. It trades about -0.29 of its potential returns per unit of risk. Arrow Electronics is currently generating about -0.14 per unit of risk. If you would invest 9,651 in GENERAL DYNAMICS P on August 29, 2024 and sell it today you would lose (192.00) from holding GENERAL DYNAMICS P or give up 1.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 78.26% |
| Values | Daily Returns |
GENERAL DYNAMICS P vs. Arrow Electronics
Performance |
| Timeline |
| GENERAL DYNAMICS P |
| Arrow Electronics |
GENERAL and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GENERAL and Arrow Electronics
The main advantage of trading using opposite GENERAL and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GENERAL position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| GENERAL vs. Arrow Electronics | GENERAL vs. Noble plc | GENERAL vs. Uber Technologies | GENERAL vs. ServiceNow |
| Arrow Electronics vs. ScanSource | Arrow Electronics vs. ABIVAX Socit Anonyme | Arrow Electronics vs. Pinnacle Sherman Multi Strategy | Arrow Electronics vs. Morningstar Unconstrained Allocation |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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