Correlation Between Fair Isaac and GE Vernova

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

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

Diversification Opportunities for Fair Isaac and GE Vernova

-0.14

Correlation Coefficient

Fair Isaac  GE Vernova

Good diversification

The 3 months correlation between Fair and GEV is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fair Isaac 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 Fair Isaac 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 Fair Isaac 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 Fair Isaac i.e., Fair Isaac and GE Vernova go up and down completely randomly.

Pair Corralation between Fair Isaac and GE Vernova

Given the investment horizon of 90 days Fair Isaac is expected to under-perform the GE Vernova. But the stock apears to be less risky and, when comparing its historical volatility, Fair Isaac is 1.4 times less risky than GE Vernova. The stock trades about -0.04 of its potential returns per unit of risk. The GE Vernova LLC is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  28,901  in GE Vernova LLC on October 26, 2024 and sell it today you would earn a total of  14,870  from holding GE Vernova LLC or generate 51.45% return on investment over 90 days.

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

Fair Isaac  vs.  GE Vernova LLC

Fair Isaac

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fair Isaac has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Fair Isaac is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

GE Vernova LLC

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GE Vernova LLC are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, GE Vernova showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fair Isaac and GE Vernova

The main advantage of trading using opposite Fair Isaac and GE Vernova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fair Isaac 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 Fair Isaac 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.