Correlation Between Hasbro and GE Vernova
Can any of the company-specific risk be diversified away by investing in both Hasbro 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 Hasbro and GE Vernova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hasbro Inc and GE Vernova LLC, you can compare the effects of market volatilities on Hasbro 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 Hasbro with a short position of GE Vernova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hasbro and GE Vernova.
Diversification Opportunities for Hasbro and GE Vernova
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hasbro and GEV is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc 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 Hasbro 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 Hasbro Inc 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 Hasbro i.e., Hasbro and GE Vernova go up and down completely randomly.
Pair Corralation between Hasbro and GE Vernova
Considering the 90-day investment horizon Hasbro is expected to generate 10.64 times less return on investment than GE Vernova. But when comparing it to its historical volatility, Hasbro Inc is 1.48 times less risky than GE Vernova. It trades about 0.03 of its potential returns per unit of risk. GE Vernova LLC is currently generating about 0.19 of returns per unit of risk over similar time horizon. 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 Against |
| Strength | Very Weak |
| Accuracy | 34.95% |
| Values | Daily Returns |
Hasbro Inc vs. GE Vernova LLC
Performance |
| Timeline |
| Hasbro Inc |
| GE Vernova LLC |
Hasbro and GE Vernova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hasbro and GE Vernova
The main advantage of trading using opposite Hasbro and GE Vernova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hasbro 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 Hasbro Inc 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.| GE Vernova vs. Titan Machinery | GE Vernova vs. Asbury Automotive Group | GE Vernova vs. Ryanair Holdings PLC | GE Vernova vs. Lululemon Athletica |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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