Correlation Between GE Aerospace and Grindr Warrant

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

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

Diversification Opportunities for GE Aerospace and Grindr Warrant

-0.61

Correlation Coefficient

GE Aerospace  Grindr Warrant

Excellent diversification

The 3 months correlation between GE Aerospace and Grindr is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Grindr Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grindr Warrant 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 Grindr Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grindr Warrant has no effect on the direction of GE Aerospace i.e., GE Aerospace and Grindr Warrant go up and down completely randomly.

Pair Corralation between GE Aerospace and Grindr Warrant

Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 0.32 times more return on investment than Grindr Warrant. However, GE Aerospace is 3.16 times less risky than Grindr Warrant. It trades about 0.37 of its potential returns per unit of risk. Grindr Warrant is currently generating about -0.09 per unit of risk. If you would invest  16,875  in GE Aerospace on October 22, 2024 and sell it today you would earn a total of  1,410  from holding GE Aerospace or generate 8.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

GE Aerospace  vs.  Grindr Warrant

GE Aerospace

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GE Aerospace are ranked lower than 3 (%) 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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Grindr Warrant

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grindr Warrant are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Grindr Warrant unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GE Aerospace and Grindr Warrant

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

The idea behind GE Aerospace and Grindr Warrant 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.