Correlation Between GE Aerospace and Ivy Advantus

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

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

Diversification Opportunities for GE Aerospace and Ivy Advantus

0.0

Correlation Coefficient

GE Aerospace  Ivy Advantus

Pay attention - limited upside

The 3 months correlation between GE Aerospace and Ivy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Ivy Advantus Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Advantus Bond 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 Ivy Advantus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Advantus Bond has no effect on the direction of GE Aerospace i.e., GE Aerospace and Ivy Advantus go up and down completely randomly.

Pair Corralation between GE Aerospace and Ivy Advantus

If you would invest  16,778  in GE Aerospace on December 20, 2024 and sell it today you would earn a total of  3,779  from holding GE Aerospace or generate 22.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GE Aerospace  vs.  Ivy Advantus Bond

GE Aerospace

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GE Aerospace are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, GE Aerospace exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ivy Advantus Bond

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ivy Advantus Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Ivy Advantus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GE Aerospace and Ivy Advantus

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

The idea behind GE Aerospace and Ivy Advantus Bond 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.