Correlation Between Dupont De and GE Vernova

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Can any of the company-specific risk be diversified away by investing in both Dupont De 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 Dupont De and GE Vernova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont De Nemours and GE Vernova LLC, you can compare the effects of market volatilities on Dupont De 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 Dupont De with a short position of GE Vernova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and GE Vernova.

Diversification Opportunities for Dupont De and GE Vernova

DupontGEVDiversified AwayDupontGEVDiversified Away100%
-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Dupont and GEV is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours 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 Dupont De 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 Dupont De Nemours 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 Dupont De i.e., Dupont De and GE Vernova go up and down completely randomly.

Pair Corralation between Dupont De and GE Vernova

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.32 times more return on investment than GE Vernova. However, Dupont De Nemours is 3.15 times less risky than GE Vernova. It trades about 0.14 of its potential returns per unit of risk. GE Vernova LLC is currently generating about -0.17 per unit of risk. If you would invest  7,736  in Dupont De Nemours on November 25, 2024 and sell it today you would earn a total of  429.00  from holding Dupont De Nemours or generate 5.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Dupont De Nemours  vs.  GE Vernova LLC

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -100102030
JavaScript chart by amCharts 3.21.15DD GEV
       Timeline  
Dupont De Nemours 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Dupont De Nemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Dupont De is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb74767880828486
GE Vernova LLC 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in GE Vernova LLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable technical and fundamental indicators, GE Vernova is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb320340360380400420440

Dupont De and GE Vernova Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.23-1.67-1.11-0.55-0.009340.541.11.662.22 0.050.100.150.20
JavaScript chart by amCharts 3.21.15DD GEV
       Returns  

Pair Trading with Dupont De and GE Vernova

The main advantage of trading using opposite Dupont De and GE Vernova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De 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 Dupont De Nemours 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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