Correlation Between GE Aerospace and Blackstar Enterprise

Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Blackstar Enterprise 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 Blackstar Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GE Aerospace and Blackstar Enterprise Group, you can compare the effects of market volatilities on GE Aerospace and Blackstar Enterprise 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 Blackstar Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Blackstar Enterprise.

Diversification Opportunities for GE Aerospace and Blackstar Enterprise

0.18

Correlation Coefficient

GE Aerospace  Blackstar Enterprise

Average diversification

The 3 months correlation between GE Aerospace and Blackstar is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Blackstar Enterprise Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstar Enterprise 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 Blackstar Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstar Enterprise has no effect on the direction of GE Aerospace i.e., GE Aerospace and Blackstar Enterprise go up and down completely randomly.

Pair Corralation between GE Aerospace and Blackstar Enterprise

Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 0.16 times more return on investment than Blackstar Enterprise. However, GE Aerospace is 6.26 times less risky than Blackstar Enterprise. It trades about 0.03 of its potential returns per unit of risk. Blackstar Enterprise Group is currently generating about -0.06 per unit of risk. If you would invest  16,610  in GE Aerospace on September 11, 2024 and sell it today you would earn a total of  517.00  from holding GE Aerospace or generate 3.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GE Aerospace  vs.  Blackstar Enterprise Group

GE Aerospace

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GE Aerospace are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, GE Aerospace is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Blackstar Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackstar Enterprise Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with GE Aerospace and Blackstar Enterprise

The main advantage of trading using opposite GE Aerospace and Blackstar Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Blackstar Enterprise 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 Blackstar Enterprise will offset losses from the drop in Blackstar Enterprise's long position.

The idea behind GE Aerospace and Blackstar Enterprise Group 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.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.