Correlation Between Valeura Energy and ConnectOne Bancorp
Can any of the company-specific risk be diversified away by investing in both Valeura Energy and ConnectOne Bancorp 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 ConnectOne Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valeura Energy and ConnectOne Bancorp, you can compare the effects of market volatilities on Valeura Energy and ConnectOne Bancorp 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 ConnectOne Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valeura Energy and ConnectOne Bancorp.
Diversification Opportunities for Valeura Energy and ConnectOne Bancorp
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Valeura and ConnectOne is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Valeura Energy and ConnectOne Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConnectOne Bancorp 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 ConnectOne Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConnectOne Bancorp has no effect on the direction of Valeura Energy i.e., Valeura Energy and ConnectOne Bancorp go up and down completely randomly.
Pair Corralation between Valeura Energy and ConnectOne Bancorp
Assuming the 90 days horizon Valeura Energy is expected to generate 2.25 times more return on investment than ConnectOne Bancorp. However, Valeura Energy is 2.25 times more volatile than ConnectOne Bancorp. It trades about 0.06 of its potential returns per unit of risk. ConnectOne Bancorp is currently generating about 0.03 per unit of risk. If you would invest 183.00 in Valeura Energy on September 28, 2024 and sell it today you would earn a total of 277.00 from holding Valeura Energy or generate 151.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valeura Energy vs. ConnectOne Bancorp
Performance |
| Timeline |
| Valeura Energy |
| ConnectOne Bancorp |
Valeura Energy and ConnectOne Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valeura Energy and ConnectOne Bancorp
The main advantage of trading using opposite Valeura Energy and ConnectOne Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valeura Energy position performs unexpectedly, ConnectOne Bancorp 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 ConnectOne Bancorp will offset losses from the drop in ConnectOne Bancorp's long position.| Valeura Energy vs. Legacy Education | Valeura Energy vs. Apple Inc | Valeura Energy vs. NVIDIA | Valeura Energy vs. Microsoft |
| ConnectOne Bancorp vs. Dime Community Bancshares | ConnectOne Bancorp vs. Washington Federal | ConnectOne Bancorp vs. CNB Financial | ConnectOne Bancorp vs. First Guaranty Bancshares |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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