Correlation Between Abcellera Biologics and GE Vernova

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

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

Diversification Opportunities for Abcellera Biologics and GE Vernova

0.77

Correlation Coefficient

Abcellera Biologics  GE Vernova

Poor diversification

The 3 months correlation between Abcellera and GEV is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Abcellera Biologics and GE Vernova LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Vernova LLC and Abcellera Biologics 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 Abcellera Biologics are associated (or correlated) with GE Vernova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE Vernova LLC has no effect on the direction of Abcellera Biologics i.e., Abcellera Biologics and GE Vernova go up and down completely randomly.

Pair Corralation between Abcellera Biologics and GE Vernova

Given the investment horizon of 90 days Abcellera Biologics is expected to under-perform the GE Vernova. In addition to that, Abcellera Biologics is 1.02 times more volatile than GE Vernova LLC. It trades about -0.04 of its total potential returns per unit of risk. GE Vernova LLC is currently generating about 0.02 per unit of volatility. If you would invest  34,266  in GE Vernova LLC on December 20, 2024 and sell it today you would lose (686.00) from holding GE Vernova LLC or give up 2.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Abcellera Biologics  vs.  GE Vernova LLC

Abcellera Biologics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Abcellera Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

GE Vernova LLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GE Vernova LLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable technical and fundamental indicators, GE Vernova is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Abcellera Biologics and GE Vernova

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

The idea behind Abcellera Biologics and GE Vernova LLC 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.