Correlation Between Viemed Healthcare and Valens
Can any of the company-specific risk be diversified away by investing in both Viemed Healthcare and Valens 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 Viemed Healthcare and Valens into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viemed Healthcare and Valens, you can compare the effects of market volatilities on Viemed Healthcare and Valens 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 Viemed Healthcare with a short position of Valens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viemed Healthcare and Valens.
Diversification Opportunities for Viemed Healthcare and Valens
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Viemed and Valens is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and Valens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valens and Viemed Healthcare 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 Viemed Healthcare are associated (or correlated) with Valens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valens has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and Valens go up and down completely randomly.
Pair Corralation between Viemed Healthcare and Valens
Considering the 90-day investment horizon Viemed Healthcare is expected to generate 0.45 times more return on investment than Valens. However, Viemed Healthcare is 2.2 times less risky than Valens. It trades about 0.14 of its potential returns per unit of risk. Valens is currently generating about 0.04 per unit of risk. If you would invest 747.00 in Viemed Healthcare on September 12, 2024 and sell it today you would earn a total of 133.00 from holding Viemed Healthcare or generate 17.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viemed Healthcare vs. Valens
Performance |
| Timeline |
| Viemed Healthcare |
| Valens |
Viemed Healthcare and Valens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viemed Healthcare and Valens
The main advantage of trading using opposite Viemed Healthcare and Valens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viemed Healthcare position performs unexpectedly, Valens 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 Valens will offset losses from the drop in Valens' long position.| Viemed Healthcare vs. Profound Medical Corp | Viemed Healthcare vs. Si Bone | Viemed Healthcare vs. IRIDEX | Viemed Healthcare vs. SurModics |
| Valens vs. NVIDIA | Valens vs. Taiwan Semiconductor Manufacturing | Valens vs. Micron Technology | Valens vs. Qualcomm Incorporated |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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