Correlation Between GE Aerospace and Integrated Ventures

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

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

Diversification Opportunities for GE Aerospace and Integrated Ventures

-0.82

Correlation Coefficient

GE Aerospace  Integrated Ventures

Pay attention - limited upside

The 3 months correlation between GE Aerospace and Integrated is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Integrated Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Ventures 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 Integrated Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Ventures has no effect on the direction of GE Aerospace i.e., GE Aerospace and Integrated Ventures go up and down completely randomly.

Pair Corralation between GE Aerospace and Integrated Ventures

Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 0.2 times more return on investment than Integrated Ventures. However, GE Aerospace is 4.97 times less risky than Integrated Ventures. It trades about 0.12 of its potential returns per unit of risk. Integrated Ventures is currently generating about -0.24 per unit of risk. If you would invest  18,235  in GE Aerospace on December 4, 2024 and sell it today you would earn a total of  2,463  from holding GE Aerospace or generate 13.51% return on investment over 90 days.

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

GE Aerospace  vs.  Integrated Ventures

GE Aerospace

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GE Aerospace are ranked lower than 9 (%) 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.

Integrated Ventures

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integrated Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with GE Aerospace and Integrated Ventures

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

The idea behind GE Aerospace and Integrated Ventures 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.