Correlation Between GE Aerospace and JPMorgan ETFs

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

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

Diversification Opportunities for GE Aerospace and JPMorgan ETFs

0.33

Correlation Coefficient

GE Aerospace  JPMorgan ETFs

Weak diversification

The 3 months correlation between GE Aerospace and JPMorgan is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and JPMorgan ETFs ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan ETFs ICAV 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 JPMorgan ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan ETFs ICAV has no effect on the direction of GE Aerospace i.e., GE Aerospace and JPMorgan ETFs go up and down completely randomly.

Pair Corralation between GE Aerospace and JPMorgan ETFs

Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 6.11 times more return on investment than JPMorgan ETFs. However, GE Aerospace is 6.11 times more volatile than JPMorgan ETFs ICAV. It trades about 0.18 of its potential returns per unit of risk. JPMorgan ETFs ICAV is currently generating about 0.08 per unit of risk. If you would invest  17,089  in GE Aerospace on December 24, 2024 and sell it today you would earn a total of  3,324  from holding GE Aerospace or generate 19.45% return on investment over 90 days.

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

GE Aerospace  vs.  JPMorgan ETFs ICAV

GE Aerospace

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GE Aerospace are ranked lower than 14 (%) 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.

JPMorgan ETFs ICAV

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan ETFs ICAV are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, JPMorgan ETFs is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GE Aerospace and JPMorgan ETFs

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

The idea behind GE Aerospace and JPMorgan ETFs ICAV 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.