Correlation Between Colfax and General Electric
Can any of the company-specific risk be diversified away by investing in both Colfax and General Electric 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 Colfax and General Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colfax and General Electric, you can compare the effects of market volatilities on Colfax and General Electric 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 Colfax with a short position of General Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colfax and General Electric.
Diversification Opportunities for Colfax and General Electric
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Colfax and General is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Colfax and General Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Electric and Colfax 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 Colfax are associated (or correlated) with General Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Electric has no effect on the direction of Colfax i.e., Colfax and General Electric go up and down completely randomly.
Pair Corralation between Colfax and General Electric
If you would invest 15,399 in General Electric on December 29, 2023 and sell it today you would earn a total of 2,613 from holding General Electric or generate 16.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 4.55% |
Values | Daily Returns |
Colfax vs. General Electric
Performance |
Timeline |
Colfax |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
General Electric |
Colfax and General Electric Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Colfax and General Electric
The main advantage of trading using opposite Colfax and General Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colfax position performs unexpectedly, General Electric 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 General Electric will offset losses from the drop in General Electric's long position.Colfax vs. Kinetik Holdings | Colfax vs. Repligen | Colfax vs. Antero Midstream Partners | Colfax vs. Merit Medical Systems |
General Electric vs. Barnes Group | General Electric vs. Babcock Wilcox Enterprises | General Electric vs. Crane Company | General Electric vs. Hillenbrand |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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