Correlation Between GE Aerospace and Innovator MSCI
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Innovator MSCI 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 Innovator MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Innovator MSCI Emerging, you can compare the effects of market volatilities on GE Aerospace and Innovator MSCI 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 Innovator MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Innovator MSCI.
Diversification Opportunities for GE Aerospace and Innovator MSCI
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GE Aerospace and Innovator is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Innovator MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator MSCI Emerging 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 Innovator MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator MSCI Emerging has no effect on the direction of GE Aerospace i.e., GE Aerospace and Innovator MSCI go up and down completely randomly.
Pair Corralation between GE Aerospace and Innovator MSCI
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 2.84 times more return on investment than Innovator MSCI. However, GE Aerospace is 2.84 times more volatile than Innovator MSCI Emerging. It trades about 0.19 of its potential returns per unit of risk. Innovator MSCI Emerging is currently generating about -0.17 per unit of risk. If you would invest 17,170 in GE Aerospace on September 2, 2024 and sell it today you would earn a total of 1,046 from holding GE Aerospace or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Aerospace vs. Innovator MSCI Emerging
Performance |
| Timeline |
| GE Aerospace |
| Innovator MSCI Emerging |
GE Aerospace and Innovator MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Innovator MSCI
The main advantage of trading using opposite GE Aerospace and Innovator MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Innovator MSCI 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 Innovator MSCI will offset losses from the drop in Innovator MSCI's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| Innovator MSCI vs. Innovator ETFs Trust | Innovator MSCI vs. First Trust Cboe | Innovator MSCI vs. Innovator SP 500 | Innovator MSCI vs. Innovator Equity Power |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |