Correlation Between GE Aerospace and CK Asset
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and CK Asset 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 CK Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and CK Asset Holdings, you can compare the effects of market volatilities on GE Aerospace and CK Asset 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 CK Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and CK Asset.
Diversification Opportunities for GE Aerospace and CK Asset
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GE Aerospace and CHKGF is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and CK Asset Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Asset Holdings 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 CK Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Asset Holdings has no effect on the direction of GE Aerospace i.e., GE Aerospace and CK Asset go up and down completely randomly.
Pair Corralation between GE Aerospace and CK Asset
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 1.03 times more return on investment than CK Asset. However, GE Aerospace is 1.03 times more volatile than CK Asset Holdings. It trades about 0.31 of its potential returns per unit of risk. CK Asset Holdings is currently generating about -0.03 per unit of risk. If you would invest 10,870 in GE Aerospace on February 2, 2024 and sell it today you would earn a total of 5,100 from holding GE Aerospace or generate 46.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.41% |
Values | Daily Returns |
GE Aerospace vs. CK Asset Holdings
Performance |
Timeline |
GE Aerospace |
CK Asset Holdings |
GE Aerospace and CK Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GE Aerospace and CK Asset
The main advantage of trading using opposite GE Aerospace and CK Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, CK Asset 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 CK Asset will offset losses from the drop in CK Asset's long position.GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Parker Hannifin | GE Aerospace vs. Smith AO |
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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.
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