Correlation Between GE Aerospace and Multicell Techs
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Multicell Techs 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 Multicell Techs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Multicell Techs, you can compare the effects of market volatilities on GE Aerospace and Multicell Techs 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 Multicell Techs. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Multicell Techs.
Diversification Opportunities for GE Aerospace and Multicell Techs
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GE Aerospace and Multicell is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Multicell Techs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multicell Techs 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 Multicell Techs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multicell Techs has no effect on the direction of GE Aerospace i.e., GE Aerospace and Multicell Techs go up and down completely randomly.
Pair Corralation between GE Aerospace and Multicell Techs
If you would invest 16,411 in GE Aerospace on March 4, 2024 and sell it today you would earn a total of 103.00 from holding GE Aerospace or generate 0.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.24% |
Values | Daily Returns |
GE Aerospace vs. Multicell Techs
Performance |
Timeline |
GE Aerospace |
Multicell Techs |
GE Aerospace and Multicell Techs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GE Aerospace and Multicell Techs
The main advantage of trading using opposite GE Aerospace and Multicell Techs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Multicell Techs 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 Multicell Techs will offset losses from the drop in Multicell Techs' long position.GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
Multicell Techs vs. LivaNova PLC | Multicell Techs vs. Electromed | Multicell Techs vs. Orthopediatrics Corp | Multicell Techs vs. SurModics |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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