Correlation Between 8426EPAD0 and GE Vernova

Can any of the company-specific risk be diversified away by investing in both 8426EPAD0 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 8426EPAD0 and GE Vernova into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US8426EPAD09 and GE Vernova LLC, you can compare the effects of market volatilities on 8426EPAD0 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 8426EPAD0 with a short position of GE Vernova. Check out your portfolio center. Please also check ongoing floating volatility patterns of 8426EPAD0 and GE Vernova.

Diversification Opportunities for 8426EPAD0 and GE Vernova

-0.84

Correlation Coefficient

8426EPAD0  GE Vernova

Pay attention - limited upside

The 3 months correlation between 8426EPAD0 and GEV is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding US8426EPAD09 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 8426EPAD0 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 US8426EPAD09 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 8426EPAD0 i.e., 8426EPAD0 and GE Vernova go up and down completely randomly.

Pair Corralation between 8426EPAD0 and GE Vernova

Assuming the 90 days trading horizon US8426EPAD09 is expected to under-perform the GE Vernova. But the bond apears to be less risky and, when comparing its historical volatility, US8426EPAD09 is 2.09 times less risky than GE Vernova. The bond trades about -0.24 of its potential returns per unit of risk. The GE Vernova LLC is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest  34,266  in GE Vernova LLC on October 21, 2024 and sell it today you would earn a total of  5,875  from holding GE Vernova LLC or generate 17.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	84.21%
Values	Daily Returns

US8426EPAD09  vs.  GE Vernova LLC

US8426EPAD09

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US8426EPAD09 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, 8426EPAD0 is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

GE Vernova LLC

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GE Vernova LLC are ranked lower than 17 (%) 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 8426EPAD0 and GE Vernova

The main advantage of trading using opposite 8426EPAD0 and GE Vernova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 8426EPAD0 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 US8426EPAD09 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..