Correlation Between Old Dominion and GE Vernova

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

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

Diversification Opportunities for Old Dominion and GE Vernova

0.44

Correlation Coefficient

Old Dominion  GE Vernova

Very weak diversification

The 3 months correlation between Old and GEV is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Old Dominion Freight 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 Old Dominion 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 Old Dominion Freight 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 Old Dominion i.e., Old Dominion and GE Vernova go up and down completely randomly.

Pair Corralation between Old Dominion and GE Vernova

Given the investment horizon of 90 days Old Dominion Freight is expected to under-perform the GE Vernova. But the stock apears to be less risky and, when comparing its historical volatility, Old Dominion Freight is 2.06 times less risky than GE Vernova. The stock trades about -0.14 of its potential returns per unit of risk. The GE Vernova LLC is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  33,746  in GE Vernova LLC on December 16, 2024 and sell it today you would lose (2,383) from holding GE Vernova LLC or give up 7.06% of portfolio value over 90 days.

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

Old Dominion Freight  vs.  GE Vernova LLC

Old Dominion Freight

Risk-Adjusted Performance

Very Weak

Over the last 90 days Old Dominion Freight has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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.

Pair Trading with Old Dominion and GE Vernova

The main advantage of trading using opposite Old Dominion and GE Vernova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Dominion 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 Old Dominion Freight 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.