Correlation Between GE Aerospace and Erytech Pharma

Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Erytech Pharma 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 Erytech Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GE Aerospace and Erytech Pharma SA, you can compare the effects of market volatilities on GE Aerospace and Erytech Pharma 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 Erytech Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Erytech Pharma.

Diversification Opportunities for GE Aerospace and Erytech Pharma

-0.37

Correlation Coefficient

GE Aerospace  Erytech Pharma

Very good diversification

The 3 months correlation between GE Aerospace and Erytech is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Erytech Pharma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erytech Pharma SA 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 Erytech Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erytech Pharma SA has no effect on the direction of GE Aerospace i.e., GE Aerospace and Erytech Pharma go up and down completely randomly.

Pair Corralation between GE Aerospace and Erytech Pharma

If you would invest  16,945  in GE Aerospace on September 12, 2024 and sell it today you would earn a total of  182.00  from holding GE Aerospace or generate 1.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

GE Aerospace  vs.  Erytech Pharma SA

GE Aerospace

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GE Aerospace are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, GE Aerospace is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Erytech Pharma SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Erytech Pharma SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Erytech Pharma is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with GE Aerospace and Erytech Pharma

The main advantage of trading using opposite GE Aerospace and Erytech Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Erytech Pharma 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 Erytech Pharma will offset losses from the drop in Erytech Pharma's long position.

The idea behind GE Aerospace and Erytech Pharma SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.