Correlation Between GE Vernova and Nextera Energy
Can any of the company-specific risk be diversified away by investing in both GE Vernova and Nextera Energy 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 GE Vernova and Nextera Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Vernova LLC and Nextera Energy Partners, you can compare the effects of market volatilities on GE Vernova and Nextera Energy 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 GE Vernova with a short position of Nextera Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Vernova and Nextera Energy.
Diversification Opportunities for GE Vernova and Nextera Energy
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GEV and Nextera is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding GE Vernova LLC and Nextera Energy Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextera Energy Partners and GE Vernova 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 GE Vernova LLC are associated (or correlated) with Nextera Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextera Energy Partners has no effect on the direction of GE Vernova i.e., GE Vernova and Nextera Energy go up and down completely randomly.
Pair Corralation between GE Vernova and Nextera Energy
Considering the 90-day investment horizon GE Vernova LLC is expected to generate 0.95 times more return on investment than Nextera Energy. However, GE Vernova LLC is 1.06 times less risky than Nextera Energy. It trades about 0.07 of its potential returns per unit of risk. Nextera Energy Partners is currently generating about -0.41 per unit of risk. If you would invest 35,403 in GE Vernova LLC on November 4, 2024 and sell it today you would earn a total of 1,885 from holding GE Vernova LLC or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Vernova LLC vs. Nextera Energy Partners
Performance |
| Timeline |
| GE Vernova LLC |
| Nextera Energy Partners |
GE Vernova and Nextera Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Vernova and Nextera Energy
The main advantage of trading using opposite GE Vernova and Nextera Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Vernova position performs unexpectedly, Nextera Energy 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 Nextera Energy will offset losses from the drop in Nextera Energy's long position.| GE Vernova vs. CAVA Group, | GE Vernova vs. Aegon NV ADR | GE Vernova vs. Biglari Holdings | GE Vernova vs. BJs Restaurants |
| Nextera Energy vs. Brookfield Renewable Corp | Nextera Energy vs. Algonquin Power Utilities | Nextera Energy vs. Clearway Energy Class | Nextera Energy vs. Clearway Energy |
Check out your portfolio center.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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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