Correlation Between Valens and POET Technologies
Can any of the company-specific risk be diversified away by investing in both Valens and POET Technologies 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 POET Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valens and POET Technologies, you can compare the effects of market volatilities on Valens and POET Technologies 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 POET Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valens and POET Technologies.
Diversification Opportunities for Valens and POET Technologies
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Valens and POET is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Valens and POET Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POET Technologies 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 POET Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POET Technologies has no effect on the direction of Valens i.e., Valens and POET Technologies go up and down completely randomly.
Pair Corralation between Valens and POET Technologies
Considering the 90-day investment horizon Valens is expected to under-perform the POET Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Valens is 1.23 times less risky than POET Technologies. The stock trades about -0.22 of its potential returns per unit of risk. The POET Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 495.00 in POET Technologies on November 18, 2024 and sell it today you would lose (3.00) from holding POET Technologies or give up 0.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valens vs. POET Technologies
Performance |
| Timeline |
| Valens |
| POET Technologies |
Valens and POET Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valens and POET Technologies
The main advantage of trading using opposite Valens and POET Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valens position performs unexpectedly, POET Technologies 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 POET Technologies will offset losses from the drop in POET Technologies' long position.| Valens vs. Wolfspeed | Valens vs. GSI Technology | Valens vs. Lattice Semiconductor | Valens vs. ON Semiconductor |
| POET Technologies vs. Pixelworks | POET Technologies vs. Valens | POET Technologies vs. CEVA Inc | POET Technologies vs. EMCORE |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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