Correlation Between GE Vernova and Transportadora
Can any of the company-specific risk be diversified away by investing in both GE Vernova and Transportadora 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 Transportadora 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 Transportadora de Gas, you can compare the effects of market volatilities on GE Vernova and Transportadora 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 Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Vernova and Transportadora.
Diversification Opportunities for GE Vernova and Transportadora
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GEV and Transportadora is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding GE Vernova LLC and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas 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 Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of GE Vernova i.e., GE Vernova and Transportadora go up and down completely randomly.
Pair Corralation between GE Vernova and Transportadora
Considering the 90-day investment horizon GE Vernova LLC is expected to generate 0.86 times more return on investment than Transportadora. However, GE Vernova LLC is 1.16 times less risky than Transportadora. It trades about 0.21 of its potential returns per unit of risk. Transportadora de Gas is currently generating about 0.08 per unit of risk. If you would invest 13,125 in GE Vernova LLC on August 26, 2024 and sell it today you would earn a total of 21,791 from holding GE Vernova LLC or generate 166.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 34.0% |
| Values | Daily Returns |
GE Vernova LLC vs. Transportadora de Gas
Performance |
| Timeline |
| GE Vernova LLC |
| Transportadora de Gas |
GE Vernova and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Vernova and Transportadora
The main advantage of trading using opposite GE Vernova and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Vernova position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora's long position.| GE Vernova vs. Kaltura | GE Vernova vs. Paiute Oil Mining | GE Vernova vs. FiscalNote Holdings | GE Vernova vs. Perseus Mining Limited |
| Transportadora vs. Petroleo Brasileiro Petrobras | Transportadora vs. Ecopetrol SA ADR | Transportadora vs. Petrleo Brasileiro SA | Transportadora vs. Equinor ASA ADR |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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