Correlation Between GE Aerospace and Aarons
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Aarons 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 GE Aerospace and Aarons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and The Aarons, you can compare the effects of market volatilities on GE Aerospace and Aarons 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 GE Aerospace with a short position of Aarons. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Aarons.
Diversification Opportunities for GE Aerospace and Aarons
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GE Aerospace and Aarons is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and The Aarons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aarons and GE Aerospace 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 GE Aerospace are associated (or correlated) with Aarons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aarons has no effect on the direction of GE Aerospace i.e., GE Aerospace and Aarons go up and down completely randomly.
Pair Corralation between GE Aerospace and Aarons
If you would invest 16,875 in GE Aerospace on October 24, 2024 and sell it today you would earn a total of 1,961 from holding GE Aerospace or generate 11.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 5.26% |
Values | Daily Returns |
GE Aerospace vs. The Aarons
Performance |
Timeline |
GE Aerospace |
Aarons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GE Aerospace and Aarons Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GE Aerospace and Aarons
The main advantage of trading using opposite GE Aerospace and Aarons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Aarons 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 Aarons will offset losses from the drop in Aarons' long position.GE Aerospace vs. Bank of America | GE Aerospace vs. RLJ Lodging Trust | GE Aerospace vs. PennyMac Finl Svcs | GE Aerospace vs. Newhydrogen |
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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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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