Correlation Between GE Vernova and Nova Vision

Can any of the company-specific risk be diversified away by investing in both GE Vernova and Nova Vision 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 Nova Vision 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 Nova Vision Acquisition, you can compare the effects of market volatilities on GE Vernova and Nova Vision 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 Nova Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Vernova and Nova Vision.

Diversification Opportunities for GE Vernova and Nova Vision

0.77

Correlation Coefficient

GE Vernova  Nova Vision

Poor diversification

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

Pair Corralation between GE Vernova and Nova Vision

If you would invest  32,873  in GE Vernova LLC on September 24, 2024 and sell it today you would earn a total of  1,619  from holding GE Vernova LLC or generate 4.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

GE Vernova LLC  vs.  Nova Vision Acquisition

GE Vernova LLC

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GE Vernova LLC are ranked lower than 14 (%) 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.

Nova Vision Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nova Vision Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nova Vision is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GE Vernova and Nova Vision

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

The idea behind GE Vernova LLC and Nova Vision Acquisition 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.