Correlation Between Visa and GE Vernova
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and GE Vernova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and GE Vernova LLC, you can compare the effects of market volatilities on Visa 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 Visa with a short position of GE Vernova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and GE Vernova.
Diversification Opportunities for Visa and GE Vernova
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Visa and GEV is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 Visa 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 Visa Class A 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 Visa i.e., Visa and GE Vernova go up and down completely randomly.
Pair Corralation between Visa and GE Vernova
Taking into account the 90-day investment horizon Visa is expected to generate 5.43 times less return on investment than GE Vernova. But when comparing it to its historical volatility, Visa Class A is 3.35 times less risky than GE Vernova. It trades about 0.1 of its potential returns per unit of risk. GE Vernova LLC is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 13,115 in GE Vernova LLC on November 9, 2024 and sell it today you would earn a total of 24,368 from holding GE Vernova LLC or generate 185.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 44.02% |
| Values | Daily Returns |
Visa Class A vs. GE Vernova LLC
Performance |
| Timeline |
| Visa Class A |
| GE Vernova LLC |
Visa and GE Vernova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and GE Vernova
The main advantage of trading using opposite Visa and GE Vernova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| GE Vernova vs. Exchange Bank | GE Vernova vs. SEI Investments | GE Vernova vs. PetMed Express | GE Vernova vs. MYT Netherlands Parent |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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