Correlation Between ARNC34 and General Electric
Can any of the company-specific risk be diversified away by investing in both ARNC34 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 ARNC34 and General Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARNC34 and General Electric, you can compare the effects of market volatilities on ARNC34 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 ARNC34 with a short position of General Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARNC34 and General Electric.
Diversification Opportunities for ARNC34 and General Electric
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ARNC34 and General is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding ARNC34 and General Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Electric and ARNC34 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 ARNC34 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 ARNC34 i.e., ARNC34 and General Electric go up and down completely randomly.
Pair Corralation between ARNC34 and General Electric
Assuming the 90 days trading horizon ARNC34 is expected to generate 0.83 times more return on investment than General Electric. However, ARNC34 is 1.2 times less risky than General Electric. It trades about 0.2 of its potential returns per unit of risk. General Electric is currently generating about -0.01 per unit of risk. If you would invest 54,566 in ARNC34 on September 23, 2024 and sell it today you would earn a total of 13,777 from holding ARNC34 or generate 25.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ARNC34 vs. General Electric
Performance |
Timeline |
ARNC34 |
General Electric |
ARNC34 and General Electric Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ARNC34 and General Electric
The main advantage of trading using opposite ARNC34 and General Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARNC34 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.ARNC34 vs. Honeywell International | ARNC34 vs. Eaton plc | ARNC34 vs. Otis Worldwide | ARNC34 vs. Inepar SA Indstria |
General Electric vs. Cognizant Technology Solutions | General Electric vs. Take Two Interactive Software | General Electric vs. Spotify Technology SA | General Electric vs. Agilent Technologies |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
Stocks Directory Find actively traded stocks across global markets | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
CEOs Directory Screen CEOs from public companies around the world |