Correlation Between ConnectOne Bancorp and Valeura Energy
Can any of the company-specific risk be diversified away by investing in both ConnectOne Bancorp and Valeura Energy 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 ConnectOne Bancorp and Valeura Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConnectOne Bancorp and Valeura Energy, you can compare the effects of market volatilities on ConnectOne Bancorp and Valeura Energy 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 ConnectOne Bancorp with a short position of Valeura Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConnectOne Bancorp and Valeura Energy.
Diversification Opportunities for ConnectOne Bancorp and Valeura Energy
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ConnectOne and Valeura is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding ConnectOne Bancorp and Valeura Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valeura Energy and ConnectOne Bancorp 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 ConnectOne Bancorp are associated (or correlated) with Valeura Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valeura Energy has no effect on the direction of ConnectOne Bancorp i.e., ConnectOne Bancorp and Valeura Energy go up and down completely randomly.
Pair Corralation between ConnectOne Bancorp and Valeura Energy
Assuming the 90 days horizon ConnectOne Bancorp is expected to generate 40.47 times less return on investment than Valeura Energy. But when comparing it to its historical volatility, ConnectOne Bancorp is 11.68 times less risky than Valeura Energy. It trades about 0.08 of its potential returns per unit of risk. Valeura Energy is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 387.00 in Valeura Energy on September 28, 2024 and sell it today you would earn a total of 73.00 from holding Valeura Energy or generate 18.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ConnectOne Bancorp vs. Valeura Energy
Performance |
| Timeline |
| ConnectOne Bancorp |
| Valeura Energy |
ConnectOne Bancorp and Valeura Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConnectOne Bancorp and Valeura Energy
The main advantage of trading using opposite ConnectOne Bancorp and Valeura Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConnectOne Bancorp position performs unexpectedly, Valeura Energy 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 Valeura Energy will offset losses from the drop in Valeura Energy's long position.| ConnectOne Bancorp vs. Dime Community Bancshares | ConnectOne Bancorp vs. Washington Federal | ConnectOne Bancorp vs. CNB Financial | ConnectOne Bancorp vs. First Guaranty Bancshares |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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