Correlation Between GE Aerospace and Nuveen Floating

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

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

Diversification Opportunities for GE Aerospace and Nuveen Floating

-0.48

Correlation Coefficient

GE Aerospace  Nuveen Floating

Very good diversification

The 3 months correlation between GE Aerospace and Nuveen is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Nuveen Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Floating Rate 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 Nuveen Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Floating Rate has no effect on the direction of GE Aerospace i.e., GE Aerospace and Nuveen Floating go up and down completely randomly.

Pair Corralation between GE Aerospace and Nuveen Floating

If you would invest  16,611  in GE Aerospace on September 4, 2024 and sell it today you would earn a total of  1,461  from holding GE Aerospace or generate 8.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

GE Aerospace  vs.  Nuveen Floating Rate

GE Aerospace

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GE Aerospace are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, GE Aerospace may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nuveen Floating Rate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Floating Rate has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, Nuveen Floating is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GE Aerospace and Nuveen Floating

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

The idea behind GE Aerospace and Nuveen Floating Rate 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.