Correlation Between SemiLEDS and Valens

Can any of the company-specific risk be diversified away by investing in both SemiLEDS 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 SemiLEDS and Valens into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SemiLEDS and Valens, you can compare the effects of market volatilities on SemiLEDS 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 SemiLEDS with a short position of Valens. Check out your portfolio center. Please also check ongoing floating volatility patterns of SemiLEDS and Valens.

Diversification Opportunities for SemiLEDS and Valens

0.14

Correlation Coefficient

SemiLEDS  Valens

Average diversification

The 3 months correlation between SemiLEDS and Valens is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding SemiLEDS and Valens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valens and SemiLEDS 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 SemiLEDS 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 SemiLEDS i.e., SemiLEDS and Valens go up and down completely randomly.

Pair Corralation between SemiLEDS and Valens

Given the investment horizon of 90 days SemiLEDS is expected to generate 1.41 times more return on investment than Valens. However, SemiLEDS is 1.41 times more volatile than Valens. It trades about 0.03 of its potential returns per unit of risk. Valens is currently generating about 0.01 per unit of risk. If you would invest  144.00  in SemiLEDS on September 16, 2024 and sell it today you would earn a total of  4.00  from holding SemiLEDS or generate 2.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SemiLEDS  vs.  Valens

SemiLEDS

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SemiLEDS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, SemiLEDS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Valens

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Valens are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, Valens is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SemiLEDS and Valens

The main advantage of trading using opposite SemiLEDS and Valens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SemiLEDS 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.

The idea behind SemiLEDS and Valens pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.