Correlation Between Planet Labs and GE Aerospace
Can any of the company-specific risk be diversified away by investing in both Planet Labs 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 Planet Labs and GE Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Labs PBC and GE Aerospace, you can compare the effects of market volatilities on Planet Labs 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 Planet Labs with a short position of GE Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Labs and GE Aerospace.
Diversification Opportunities for Planet Labs and GE Aerospace
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Planet and GE Aerospace is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Planet Labs PBC and GE Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Aerospace and Planet Labs 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 Planet Labs PBC 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 Planet Labs i.e., Planet Labs and GE Aerospace go up and down completely randomly.
Pair Corralation between Planet Labs and GE Aerospace
Allowing for the 90-day total investment horizon Planet Labs PBC is expected to under-perform the GE Aerospace. In addition to that, Planet Labs is 2.22 times more volatile than GE Aerospace. It trades about -0.03 of its total potential returns per unit of risk. GE Aerospace is currently generating about 0.15 per unit of volatility. If you would invest 4,607 in GE Aerospace on February 4, 2024 and sell it today you would earn a total of 11,804 from holding GE Aerospace or generate 256.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Planet Labs PBC vs. GE Aerospace
Performance |
Timeline |
Planet Labs PBC |
GE Aerospace |
Planet Labs and GE Aerospace Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Planet Labs and GE Aerospace
The main advantage of trading using opposite Planet Labs and GE Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Labs 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.Planet Labs vs. Astra Space | Planet Labs vs. Virgin Galactic Holdings | Planet Labs vs. Eve Holding | Planet Labs vs. Redwire Corp |
GE Aerospace vs. Graco Inc | GE Aerospace vs. Flowserve | GE Aerospace vs. Donaldson | GE Aerospace vs. IDEX Corporation |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |