Correlation Between GE Aerospace and Retail Holdings
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Retail Holdings 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 Retail Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Retail Holdings NV, you can compare the effects of market volatilities on GE Aerospace and Retail Holdings 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 Retail Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Retail Holdings.
Diversification Opportunities for GE Aerospace and Retail Holdings
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GE Aerospace and Retail is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Retail Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Holdings NV 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 Retail Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Holdings NV has no effect on the direction of GE Aerospace i.e., GE Aerospace and Retail Holdings go up and down completely randomly.
Pair Corralation between GE Aerospace and Retail Holdings
If you would invest 13.00 in Retail Holdings NV on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Retail Holdings NV or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 1.59% |
Values | Daily Returns |
GE Aerospace vs. Retail Holdings NV
Performance |
Timeline |
GE Aerospace |
Retail Holdings NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GE Aerospace and Retail Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GE Aerospace and Retail Holdings
The main advantage of trading using opposite GE Aerospace and Retail Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Retail Holdings 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 Retail Holdings will offset losses from the drop in Retail Holdings' long position.GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
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Check out your portfolio center.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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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