Correlation Between ReNew Energy and GE Vernova

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

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

Diversification Opportunities for ReNew Energy and GE Vernova

-0.16

Correlation Coefficient

ReNew Energy  GE Vernova

Good diversification

The 3 months correlation between ReNew and GEV is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ReNew Energy Global 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 ReNew Energy 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 ReNew Energy Global 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 ReNew Energy i.e., ReNew Energy and GE Vernova go up and down completely randomly.

Pair Corralation between ReNew Energy and GE Vernova

Assuming the 90 days horizon ReNew Energy Global is expected to under-perform the GE Vernova. In addition to that, ReNew Energy is 3.12 times more volatile than GE Vernova LLC. It trades about 0.0 of its total potential returns per unit of risk. GE Vernova LLC is currently generating about 0.0 per unit of volatility. If you would invest  33,387  in GE Vernova LLC on November 28, 2024 and sell it today you would lose (1,618) from holding GE Vernova LLC or give up 4.85% of portfolio value over 90 days.

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

ReNew Energy Global  vs.  GE Vernova LLC

ReNew Energy Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days ReNew Energy Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ReNew Energy is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated 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 ReNew Energy and GE Vernova

The main advantage of trading using opposite ReNew Energy and GE Vernova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ReNew Energy 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 ReNew Energy Global 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.