Correlation Between GE Vernova and REX American
Can any of the company-specific risk be diversified away by investing in both GE Vernova and REX American 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 REX American 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 REX American Resources, you can compare the effects of market volatilities on GE Vernova and REX American 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 REX American. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Vernova and REX American.
Diversification Opportunities for GE Vernova and REX American
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GEV and REX is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding GE Vernova LLC and REX American Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REX American Resources 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 REX American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REX American Resources has no effect on the direction of GE Vernova i.e., GE Vernova and REX American go up and down completely randomly.
Pair Corralation between GE Vernova and REX American
Considering the 90-day investment horizon GE Vernova LLC is expected to generate 1.44 times more return on investment than REX American. However, GE Vernova is 1.44 times more volatile than REX American Resources. It trades about 0.19 of its potential returns per unit of risk. REX American Resources is currently generating about 0.03 per unit of risk. If you would invest 14,618 in GE Vernova LLC on February 24, 2024 and sell it today you would earn a total of 1,549 from holding GE Vernova LLC or generate 10.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.65% |
Values | Daily Returns |
GE Vernova LLC vs. REX American Resources
Performance |
Timeline |
GE Vernova LLC |
REX American Resources |
GE Vernova and REX American Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GE Vernova and REX American
The main advantage of trading using opposite GE Vernova and REX American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Vernova position performs unexpectedly, REX American 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 REX American will offset losses from the drop in REX American's long position.GE Vernova vs. Advent Technologies Holdings | GE Vernova vs. Eos Energy Enterprises | GE Vernova vs. CuriosityStream |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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