Correlation Between Southland Holdings and GE Vernova

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

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

Diversification Opportunities for Southland Holdings and GE Vernova

-0.47

Correlation Coefficient

Southland Holdings  GE Vernova

Very good diversification

The 3 months correlation between Southland and GEV is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Southland Holdings 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 Southland Holdings 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 Southland Holdings 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 Southland Holdings i.e., Southland Holdings and GE Vernova go up and down completely randomly.

Pair Corralation between Southland Holdings and GE Vernova

Given the investment horizon of 90 days Southland Holdings is expected to generate 2.37 times more return on investment than GE Vernova. However, Southland Holdings is 2.37 times more volatile than GE Vernova LLC. It trades about 0.11 of its potential returns per unit of risk. GE Vernova LLC is currently generating about 0.11 per unit of risk. If you would invest  280.00  in Southland Holdings on October 6, 2024 and sell it today you would earn a total of  69.00  from holding Southland Holdings or generate 24.64% return on investment over 90 days.

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

Southland Holdings  vs.  GE Vernova LLC

Southland Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Southland Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Southland Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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

Pair Trading with Southland Holdings and GE Vernova

The main advantage of trading using opposite Southland Holdings and GE Vernova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southland Holdings 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 Southland Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.