Correlation Between GE Vernova and Azure Power

Can any of the company-specific risk be diversified away by investing in both GE Vernova and Azure Power 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 Azure Power 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 Azure Power Global, you can compare the effects of market volatilities on GE Vernova and Azure Power 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 Azure Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Vernova and Azure Power.

Diversification Opportunities for GE Vernova and Azure Power

-0.36

Correlation Coefficient

GE Vernova  Azure Power

Very good diversification

The 3 months correlation between GEV and Azure is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding GE Vernova LLC and Azure Power Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azure Power Global 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 Azure Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azure Power Global has no effect on the direction of GE Vernova i.e., GE Vernova and Azure Power go up and down completely randomly.

Pair Corralation between GE Vernova and Azure Power

Considering the 90-day investment horizon GE Vernova is expected to generate 1.81 times less return on investment than Azure Power. But when comparing it to its historical volatility, GE Vernova LLC is 7.02 times less risky than Azure Power. It trades about 0.32 of its potential returns per unit of risk. Azure Power Global is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  75.00  in Azure Power Global on May 4, 2025 and sell it today you would earn a total of  0.00  from holding Azure Power Global or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GE Vernova LLC  vs.  Azure Power Global

GE Vernova LLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GE Vernova LLC are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, GE Vernova showed solid returns over the last few months and may actually be approaching a breakup point.

Azure Power Global

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Azure Power Global are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Azure Power reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GE Vernova and Azure Power

The main advantage of trading using opposite GE Vernova and Azure Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Vernova position performs unexpectedly, Azure Power 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 Azure Power will offset losses from the drop in Azure Power's long position.

The idea behind GE Vernova LLC and Azure Power Global 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.