Correlation Between GE Aerospace and MerlynAI Corp

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

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

Diversification Opportunities for GE Aerospace and MerlynAI Corp

0.0

Correlation Coefficient

GE Aerospace  MerlynAI Corp

Pay attention - limited upside

The 3 months correlation between GE Aerospace and MerlynAI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and MerlynAI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MerlynAI Corp 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 MerlynAI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MerlynAI Corp has no effect on the direction of GE Aerospace i.e., GE Aerospace and MerlynAI Corp go up and down completely randomly.

Pair Corralation between GE Aerospace and MerlynAI Corp

If you would invest  16,805  in GE Aerospace on December 11, 2024 and sell it today you would earn a total of  2,407  from holding GE Aerospace or generate 14.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GE Aerospace  vs.  MerlynAI Corp

GE Aerospace

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GE Aerospace are ranked lower than 10 (%) 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.

MerlynAI Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days MerlynAI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, MerlynAI Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GE Aerospace and MerlynAI Corp

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

The idea behind GE Aerospace and MerlynAI Corp 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.