Correlation Between Valeura Energy and Altura Energy
Can any of the company-specific risk be diversified away by investing in both Valeura Energy and Altura 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 Valeura Energy and Altura Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valeura Energy and Altura Energy, you can compare the effects of market volatilities on Valeura Energy and Altura 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 Valeura Energy with a short position of Altura Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valeura Energy and Altura Energy.
Diversification Opportunities for Valeura Energy and Altura Energy
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Valeura and Altura is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Valeura Energy and Altura Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altura Energy and Valeura Energy 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 Valeura Energy are associated (or correlated) with Altura Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altura Energy has no effect on the direction of Valeura Energy i.e., Valeura Energy and Altura Energy go up and down completely randomly.
Pair Corralation between Valeura Energy and Altura Energy
Assuming the 90 days horizon Valeura Energy is expected to generate 2.87 times less return on investment than Altura Energy. But when comparing it to its historical volatility, Valeura Energy is 1.3 times less risky than Altura Energy. It trades about 0.17 of its potential returns per unit of risk. Altura Energy is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 663.00 in Altura Energy on August 30, 2024 and sell it today you would earn a total of 364.00 from holding Altura Energy or generate 54.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Valeura Energy vs. Altura Energy
Performance |
| Timeline |
| Valeura Energy |
| Altura Energy |
Valeura Energy and Altura Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valeura Energy and Altura Energy
The main advantage of trading using opposite Valeura Energy and Altura Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valeura Energy position performs unexpectedly, Altura 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 Altura Energy will offset losses from the drop in Altura Energy's long position.| Valeura Energy vs. Thai Beverage PCL | Valeura Energy vs. Park Ohio Holdings | Valeura Energy vs. Willamette Valley Vineyards | Valeura Energy vs. EMCOR Group |
| Altura Energy vs. Yamaha Motor Co | Altura Energy vs. Nitto Denko Corp | Altura Energy vs. Farmers Merchants Bancorp | Altura Energy vs. Furukawa Electric Co |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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