Correlation Between GE Aerospace and Nintendo
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Nintendo 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 Nintendo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Nintendo Co ADR, you can compare the effects of market volatilities on GE Aerospace and Nintendo 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 Nintendo. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Nintendo.
Diversification Opportunities for GE Aerospace and Nintendo
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GE Aerospace and Nintendo is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Nintendo Co ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nintendo Co ADR 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 Nintendo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nintendo Co ADR has no effect on the direction of GE Aerospace i.e., GE Aerospace and Nintendo go up and down completely randomly.
Pair Corralation between GE Aerospace and Nintendo
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 2.22 times more return on investment than Nintendo. However, GE Aerospace is 2.22 times more volatile than Nintendo Co ADR. It trades about 0.28 of its potential returns per unit of risk. Nintendo Co ADR is currently generating about -0.3 per unit of risk. If you would invest 13,961 in GE Aerospace on January 31, 2024 and sell it today you would earn a total of 2,488 from holding GE Aerospace or generate 17.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
GE Aerospace vs. Nintendo Co ADR
Performance |
Timeline |
GE Aerospace |
Nintendo Co ADR |
GE Aerospace and Nintendo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GE Aerospace and Nintendo
The main advantage of trading using opposite GE Aerospace and Nintendo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Nintendo 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 Nintendo will offset losses from the drop in Nintendo's long position.GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
Nintendo vs. Now Inc | Nintendo vs. Oil States International | Nintendo vs. Oceaneering International | Nintendo vs. Geospace 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Transaction History View history of all your transactions and understand their impact on performance |