Correlation Between GE Vernova and NH Foods
Can any of the company-specific risk be diversified away by investing in both GE Vernova and NH Foods 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 NH Foods 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 NH Foods Ltd, you can compare the effects of market volatilities on GE Vernova and NH Foods 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 NH Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Vernova and NH Foods.
Diversification Opportunities for GE Vernova and NH Foods
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GEV and NIPMY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GE Vernova LLC and NH Foods Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Foods 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 NH Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH Foods has no effect on the direction of GE Vernova i.e., GE Vernova and NH Foods go up and down completely randomly.
Pair Corralation between GE Vernova and NH Foods
Considering the 90-day investment horizon GE Vernova LLC is expected to generate 4.09 times more return on investment than NH Foods. However, GE Vernova is 4.09 times more volatile than NH Foods Ltd. It trades about 0.19 of its potential returns per unit of risk. NH Foods Ltd is currently generating about 0.1 per unit of risk. If you would invest 13,125 in GE Vernova LLC on September 3, 2024 and sell it today you would earn a total of 20,287 from holding GE Vernova LLC or generate 154.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 34.95% |
| Values | Daily Returns |
GE Vernova LLC vs. NH Foods Ltd
Performance |
| Timeline |
| GE Vernova LLC |
| NH Foods |
GE Vernova and NH Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Vernova and NH Foods
The main advantage of trading using opposite GE Vernova and NH Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Vernova position performs unexpectedly, NH Foods 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 NH Foods will offset losses from the drop in NH Foods' long position.| GE Vernova vs. Titan Machinery | GE Vernova vs. Asbury Automotive Group | GE Vernova vs. Ryanair Holdings PLC | GE Vernova vs. Lululemon Athletica |
| NH Foods vs. Kellanova | NH Foods vs. Lancaster Colony | NH Foods vs. The A2 Milk | NH Foods vs. Altavoz Entertainment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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