Correlation Between Valvoline and Marine Products
Can any of the company-specific risk be diversified away by investing in both Valvoline and Marine Products 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 Valvoline and Marine Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valvoline and Marine Products, you can compare the effects of market volatilities on Valvoline and Marine Products 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 Valvoline with a short position of Marine Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valvoline and Marine Products.
Diversification Opportunities for Valvoline and Marine Products
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Valvoline and Marine is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Valvoline and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products and Valvoline 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 Valvoline are associated (or correlated) with Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products has no effect on the direction of Valvoline i.e., Valvoline and Marine Products go up and down completely randomly.
Pair Corralation between Valvoline and Marine Products
Considering the 90-day investment horizon Valvoline is expected to generate 0.67 times more return on investment than Marine Products. However, Valvoline is 1.48 times less risky than Marine Products. It trades about 0.04 of its potential returns per unit of risk. Marine Products is currently generating about 0.02 per unit of risk. If you would invest 3,505 in Valvoline on September 3, 2024 and sell it today you would earn a total of 439.00 from holding Valvoline or generate 12.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valvoline vs. Marine Products
Performance |
| Timeline |
| Valvoline |
| Marine Products |
Valvoline and Marine Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valvoline and Marine Products
The main advantage of trading using opposite Valvoline and Marine Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valvoline position performs unexpectedly, Marine Products 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 Marine Products will offset losses from the drop in Marine Products' long position.| Valvoline vs. Cosan SA ADR | Valvoline vs. Delek Energy | Valvoline vs. Crossamerica Partners LP | Valvoline vs. Par Pacific Holdings |
| Marine Products vs. BRP Inc | Marine Products vs. Brunswick | Marine Products vs. EZGO Technologies | Marine Products vs. SCOR PK |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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