Correlation Between US Global and Valvoline
Can any of the company-specific risk be diversified away by investing in both US Global and Valvoline 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 US Global and Valvoline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Investors and Valvoline, you can compare the effects of market volatilities on US Global and Valvoline 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 US Global with a short position of Valvoline. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and Valvoline.
Diversification Opportunities for US Global and Valvoline
Significant diversification
The 3 months correlation between GROW and Valvoline is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding US Global Investors and Valvoline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valvoline and US Global 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 US Global Investors are associated (or correlated) with Valvoline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valvoline has no effect on the direction of US Global i.e., US Global and Valvoline go up and down completely randomly.
Pair Corralation between US Global and Valvoline
Given the investment horizon of 90 days US Global Investors is expected to generate 0.65 times more return on investment than Valvoline. However, US Global Investors is 1.55 times less risky than Valvoline. It trades about 0.06 of its potential returns per unit of risk. Valvoline is currently generating about -0.12 per unit of risk. If you would invest 245.00 in US Global Investors on August 27, 2024 and sell it today you would earn a total of 4.00 from holding US Global Investors or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global Investors vs. Valvoline
Performance |
| Timeline |
| US Global Investors |
| Valvoline |
US Global and Valvoline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and Valvoline
The main advantage of trading using opposite US Global and Valvoline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global position performs unexpectedly, Valvoline 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 Valvoline will offset losses from the drop in Valvoline's long position.| US Global vs. Gladstone Investment | US Global vs. PennantPark Floating Rate | US Global vs. Horizon Technology Finance | US Global vs. Stellus Capital Investment |
| Valvoline vs. Cosan SA ADR | Valvoline vs. Delek Energy | Valvoline vs. Crossamerica Partners LP | Valvoline vs. Par Pacific Holdings |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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