Correlation Between GE Vernova and PT Semen

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

Diversification Opportunities for GE Vernova and PT Semen

-0.65

Correlation Coefficient

GE Vernova  PT Semen

Excellent diversification

The 3 months correlation between GEV and PSGTF is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding GE Vernova LLC and PT Semen Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Semen Indonesia 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 PT Semen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Semen Indonesia has no effect on the direction of GE Vernova i.e., GE Vernova and PT Semen go up and down completely randomly.

Pair Corralation between GE Vernova and PT Semen

If you would invest  34,729  in GE Vernova LLC on October 25, 2024 and sell it today you would earn a total of  8,024  from holding GE Vernova LLC or generate 23.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

GE Vernova LLC  vs.  PT Semen Indonesia

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 conflicting technical and fundamental indicators, GE Vernova showed solid returns over the last few months and may actually be approaching a breakup point.

PT Semen Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Semen Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with GE Vernova and PT Semen

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

The idea behind GE Vernova LLC and PT Semen Indonesia 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.