Correlation Between NH Foods and GE Vernova
Can any of the company-specific risk be diversified away by investing in both NH Foods 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 NH Foods and GE Vernova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Foods Ltd and GE Vernova LLC, you can compare the effects of market volatilities on NH Foods 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 NH Foods with a short position of GE Vernova. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Foods and GE Vernova.
Diversification Opportunities for NH Foods and GE Vernova
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NIPMY and GEV is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NH Foods Ltd 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 NH Foods 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 NH Foods Ltd 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 NH Foods i.e., NH Foods and GE Vernova go up and down completely randomly.
Pair Corralation between NH Foods and GE Vernova
Assuming the 90 days horizon NH Foods is expected to generate 17.82 times less return on investment than GE Vernova. But when comparing it to its historical volatility, NH Foods Ltd is 6.58 times less risky than GE Vernova. It trades about 0.07 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 4, 2024 and sell it today you would earn a total of 20,629 from holding GE Vernova LLC or generate 157.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 46.77% |
| Values | Daily Returns |
NH Foods Ltd vs. GE Vernova LLC
Performance |
| Timeline |
| NH Foods |
| GE Vernova LLC |
NH Foods and GE Vernova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Foods and GE Vernova
The main advantage of trading using opposite NH Foods and GE Vernova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Foods 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 NH Foods Ltd 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. Natural Alternatives International | GE Vernova vs. Turning Point Brands | GE Vernova vs. BBB Foods | GE Vernova vs. Ispire Technology Common |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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