Correlation Between GE Aerospace and Fidelity Emerging
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Fidelity Emerging 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 Fidelity Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Fidelity Emerging Markets, you can compare the effects of market volatilities on GE Aerospace and Fidelity Emerging 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 Fidelity Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Fidelity Emerging.
Diversification Opportunities for GE Aerospace and Fidelity Emerging
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GE Aerospace and Fidelity is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Fidelity Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Emerging Markets 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 Fidelity Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Emerging Markets has no effect on the direction of GE Aerospace i.e., GE Aerospace and Fidelity Emerging go up and down completely randomly.
Pair Corralation between GE Aerospace and Fidelity Emerging
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 1.62 times more return on investment than Fidelity Emerging. However, GE Aerospace is 1.62 times more volatile than Fidelity Emerging Markets. It trades about 0.16 of its potential returns per unit of risk. Fidelity Emerging Markets is currently generating about -0.14 per unit of risk. If you would invest 17,536 in GE Aerospace on August 29, 2024 and sell it today you would earn a total of 924.00 from holding GE Aerospace or generate 5.27% 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. Fidelity Emerging Markets
Performance |
| Timeline |
| GE Aerospace |
| Fidelity Emerging Markets |
GE Aerospace and Fidelity Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Fidelity Emerging
The main advantage of trading using opposite GE Aerospace and Fidelity Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Fidelity Emerging 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 Fidelity Emerging will offset losses from the drop in Fidelity Emerging's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| Fidelity Emerging vs. Invesco PureBeta MSCI | Fidelity Emerging vs. Aquagold International | Fidelity Emerging vs. Morningstar Unconstrained Allocation | Fidelity Emerging vs. High Yield Municipal Fund |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| 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 |