Correlation Between GE Vernova and Turning Point
Can any of the company-specific risk be diversified away by investing in both GE Vernova and Turning Point 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 Turning Point 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 Turning Point Brands, you can compare the effects of market volatilities on GE Vernova and Turning Point 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 Turning Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Vernova and Turning Point.
Diversification Opportunities for GE Vernova and Turning Point
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GEV and Turning is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding GE Vernova LLC and Turning Point Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turning Point Brands 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 Turning Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turning Point Brands has no effect on the direction of GE Vernova i.e., GE Vernova and Turning Point go up and down completely randomly.
Pair Corralation between GE Vernova and Turning Point
Considering the 90-day investment horizon GE Vernova LLC is expected to generate 1.5 times more return on investment than Turning Point. However, GE Vernova is 1.5 times more volatile than Turning Point Brands. It trades about 0.19 of its potential returns per unit of risk. Turning Point Brands is currently generating about 0.12 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 | Moves Together |
| Strength | Strong |
| Accuracy | 34.95% |
| Values | Daily Returns |
GE Vernova LLC vs. Turning Point Brands
Performance |
| Timeline |
| GE Vernova LLC |
| Turning Point Brands |
GE Vernova and Turning Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Vernova and Turning Point
The main advantage of trading using opposite GE Vernova and Turning Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Vernova position performs unexpectedly, Turning Point 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 Turning Point will offset losses from the drop in Turning Point's long position.| GE Vernova vs. Titan Machinery | GE Vernova vs. Asbury Automotive Group | GE Vernova vs. Ryanair Holdings PLC | GE Vernova vs. Lululemon Athletica |
| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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