Correlation Between GOLDMAN and GE Aerospace
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By analyzing existing cross correlation between GOLDMAN SACHS GROUP and GE Aerospace, you can compare the effects of market volatilities on GOLDMAN 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 GOLDMAN with a short position of GE Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN and GE Aerospace.
Diversification Opportunities for GOLDMAN and GE Aerospace
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GOLDMAN and GE Aerospace is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS GROUP and GE Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Aerospace and GOLDMAN 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 GOLDMAN SACHS GROUP 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 GOLDMAN i.e., GOLDMAN and GE Aerospace go up and down completely randomly.
Pair Corralation between GOLDMAN and GE Aerospace
Assuming the 90 days trading horizon GOLDMAN SACHS GROUP is expected to under-perform the GE Aerospace. But the bond apears to be less risky and, when comparing its historical volatility, GOLDMAN SACHS GROUP is 1.02 times less risky than GE Aerospace. The bond trades about -0.08 of its potential returns per unit of risk. The GE Aerospace is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 16,397 in GE Aerospace on September 3, 2024 and sell it today you would earn a total of 1,819 from holding GE Aerospace or generate 11.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 43.75% |
| Values | Daily Returns |
GOLDMAN SACHS GROUP vs. GE Aerospace
Performance |
| Timeline |
| GOLDMAN SACHS GROUP |
| GE Aerospace |
GOLDMAN and GE Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLDMAN and GE Aerospace
The main advantage of trading using opposite GOLDMAN and GE Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLDMAN 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.The idea behind GOLDMAN SACHS GROUP and GE Aerospace pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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