Correlation Between GE Vernova and SOCGEN

Can any of the company-specific risk be diversified away by investing in both GE Vernova and SOCGEN 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 SOCGEN 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 SOCGEN 6221 15 JUN 33, you can compare the effects of market volatilities on GE Vernova and SOCGEN 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 SOCGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Vernova and SOCGEN.

Diversification Opportunities for GE Vernova and SOCGEN

-0.41

Correlation Coefficient

GE Vernova  SOCGEN

Very good diversification

The 3 months correlation between GEV and SOCGEN is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding GE Vernova LLC and SOCGEN 6221 15 JUN 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOCGEN 6221 15 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 SOCGEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOCGEN 6221 15 has no effect on the direction of GE Vernova i.e., GE Vernova and SOCGEN go up and down completely randomly.

Pair Corralation between GE Vernova and SOCGEN

Considering the 90-day investment horizon GE Vernova LLC is expected to under-perform the SOCGEN. In addition to that, GE Vernova is 12.12 times more volatile than SOCGEN 6221 15 JUN 33. It trades about -0.01 of its total potential returns per unit of risk. SOCGEN 6221 15 JUN 33 is currently generating about 0.04 per unit of volatility. If you would invest  9,946  in SOCGEN 6221 15 JUN 33 on December 29, 2024 and sell it today you would earn a total of  70.00  from holding SOCGEN 6221 15 JUN 33 or generate 0.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	75.41%
Values	Daily Returns

GE Vernova LLC  vs.  SOCGEN 6221 15 JUN 33

GE Vernova LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days GE Vernova LLC has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

SOCGEN 6221 15

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SOCGEN 6221 15 JUN 33 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SOCGEN is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GE Vernova and SOCGEN

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

The idea behind GE Vernova LLC and SOCGEN 6221 15 JUN 33 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.