Correlation Between Valens and Hawkins
Can any of the company-specific risk be diversified away by investing in both Valens and Hawkins 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 Valens and Hawkins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valens and Hawkins, you can compare the effects of market volatilities on Valens and Hawkins 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 Valens with a short position of Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valens and Hawkins.
Diversification Opportunities for Valens and Hawkins
Average diversification
The 3 months correlation between Valens and Hawkins is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Valens and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins and Valens 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 Valens are associated (or correlated) with Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of Valens i.e., Valens and Hawkins go up and down completely randomly.
Pair Corralation between Valens and Hawkins
Considering the 90-day investment horizon Valens is expected to under-perform the Hawkins. In addition to that, Valens is 1.53 times more volatile than Hawkins. It trades about -0.04 of its total potential returns per unit of risk. Hawkins is currently generating about 0.15 per unit of volatility. If you would invest 8,475 in Hawkins on September 2, 2024 and sell it today you would earn a total of 4,976 from holding Hawkins or generate 58.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valens vs. Hawkins
Performance |
| Timeline |
| Valens |
| Hawkins |
Valens and Hawkins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valens and Hawkins
The main advantage of trading using opposite Valens and Hawkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valens position performs unexpectedly, Hawkins 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 Hawkins will offset losses from the drop in Hawkins' long position.| Valens vs. Wolfspeed | Valens vs. GSI Technology | Valens vs. Lattice Semiconductor | Valens vs. ON Semiconductor |
| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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