Correlation Between GE Aerospace and Tortoise Pipeline

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

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

Diversification Opportunities for GE Aerospace and Tortoise Pipeline

-0.51

Correlation Coefficient

GE Aerospace  Tortoise Pipeline

Excellent diversification

The 3 months correlation between GE Aerospace and Tortoise is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Tortoise Pipeline And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tortoise Pipeline And 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 Tortoise Pipeline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tortoise Pipeline And has no effect on the direction of GE Aerospace i.e., GE Aerospace and Tortoise Pipeline go up and down completely randomly.

Pair Corralation between GE Aerospace and Tortoise Pipeline

Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 1.35 times more return on investment than Tortoise Pipeline. However, GE Aerospace is 1.35 times more volatile than Tortoise Pipeline And. It trades about 0.11 of its potential returns per unit of risk. Tortoise Pipeline And is currently generating about 0.14 per unit of risk. If you would invest  17,507  in GE Aerospace on October 27, 2024 and sell it today you would earn a total of  2,168  from holding GE Aerospace or generate 12.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	68.33%
Values	Daily Returns

GE Aerospace  vs.  Tortoise Pipeline And

GE Aerospace

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GE Aerospace are ranked lower than 8 (%) 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.

Tortoise Pipeline And

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Tortoise Pipeline And has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively fragile basic indicators, Tortoise Pipeline may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with GE Aerospace and Tortoise Pipeline

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

The idea behind GE Aerospace and Tortoise Pipeline And 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.