Correlation Between CIRCOR International and GE Aerospace
Can any of the company-specific risk be diversified away by investing in both CIRCOR International and GE Aerospace 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 CIRCOR International and GE Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIRCOR International and GE Aerospace, you can compare the effects of market volatilities on CIRCOR International and GE Aerospace 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 CIRCOR International with a short position of GE Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIRCOR International and GE Aerospace.
Diversification Opportunities for CIRCOR International and GE Aerospace
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CIRCOR and GE Aerospace is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding CIRCOR International and GE Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Aerospace and CIRCOR International 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 CIRCOR International are associated (or correlated) with GE Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE Aerospace has no effect on the direction of CIRCOR International i.e., CIRCOR International and GE Aerospace go up and down completely randomly.
Pair Corralation between CIRCOR International and GE Aerospace
If you would invest 13,826 in GE Aerospace on January 26, 2024 and sell it today you would earn a total of 2,093 from holding GE Aerospace or generate 15.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 4.76% |
Values | Daily Returns |
CIRCOR International vs. GE Aerospace
Performance |
Timeline |
CIRCOR International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GE Aerospace |
CIRCOR International and GE Aerospace Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CIRCOR International and GE Aerospace
The main advantage of trading using opposite CIRCOR International and GE Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIRCOR International position performs unexpectedly, GE Aerospace 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 GE Aerospace will offset losses from the drop in GE Aerospace's long position.CIRCOR International vs. Helios Technologies | CIRCOR International vs. Enpro Industries | CIRCOR International vs. Omega Flex | CIRCOR International vs. Luxfer Holdings PLC |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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