Correlation Between GE Vernova and 31620MBJ4

Can any of the company-specific risk be diversified away by investing in both GE Vernova and 31620MBJ4 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 Vernova and 31620MBJ4 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GE Vernova LLC and US31620MBJ45, you can compare the effects of market volatilities on GE Vernova and 31620MBJ4 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 Vernova with a short position of 31620MBJ4. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Vernova and 31620MBJ4.

Diversification Opportunities for GE Vernova and 31620MBJ4

-0.01

Correlation Coefficient

GE Vernova  31620MBJ4

Good diversification

The 3 months correlation between GEV and 31620MBJ4 is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding GE Vernova LLC and US31620MBJ45 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US31620MBJ45 and GE Vernova 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 Vernova LLC are associated (or correlated) with 31620MBJ4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US31620MBJ45 has no effect on the direction of GE Vernova i.e., GE Vernova and 31620MBJ4 go up and down completely randomly.

Pair Corralation between GE Vernova and 31620MBJ4

Considering the 90-day investment horizon GE Vernova LLC is expected to generate 2.84 times more return on investment than 31620MBJ4. However, GE Vernova is 2.84 times more volatile than US31620MBJ45. It trades about 0.19 of its potential returns per unit of risk. US31620MBJ45 is currently generating about 0.02 per unit of risk. If you would invest  13,125  in GE Vernova LLC on September 12, 2024 and sell it today you would earn a total of  21,010  from holding GE Vernova LLC or generate 160.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	79.65%
Values	Daily Returns

GE Vernova LLC  vs.  US31620MBJ45

GE Vernova LLC

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GE Vernova LLC are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, GE Vernova showed solid returns over the last few months and may actually be approaching a breakup point.

US31620MBJ45

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US31620MBJ45 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 31620MBJ4 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GE Vernova and 31620MBJ4

The main advantage of trading using opposite GE Vernova and 31620MBJ4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Vernova position performs unexpectedly, 31620MBJ4 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 31620MBJ4 will offset losses from the drop in 31620MBJ4's long position.

The idea behind GE Vernova LLC and US31620MBJ45 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..