Correlation Between Chicago Atlantic and Valeo SE

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

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

Diversification Opportunities for Chicago Atlantic and Valeo SE

-0.37

Correlation Coefficient

Chicago Atlantic  Valeo SE

Very good diversification

The 3 months correlation between Chicago and Valeo is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Chicago Atlantic BDC, and Valeo SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valeo SE and Chicago Atlantic 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 Chicago Atlantic BDC, are associated (or correlated) with Valeo SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valeo SE has no effect on the direction of Chicago Atlantic i.e., Chicago Atlantic and Valeo SE go up and down completely randomly.

Pair Corralation between Chicago Atlantic and Valeo SE

Given the investment horizon of 90 days Chicago Atlantic BDC, is expected to under-perform the Valeo SE. But the stock apears to be less risky and, when comparing its historical volatility, Chicago Atlantic BDC, is 4.63 times less risky than Valeo SE. The stock trades about -0.12 of its potential returns per unit of risk. The Valeo SE is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  797.00  in Valeo SE on September 22, 2024 and sell it today you would earn a total of  106.00  from holding Valeo SE or generate 13.3% return on investment over 90 days.

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

Chicago Atlantic BDC,  vs.  Valeo SE

Chicago Atlantic BDC,

Risk-Adjusted Performance

9 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chicago Atlantic BDC, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Chicago Atlantic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Valeo SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Valeo SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Chicago Atlantic and Valeo SE

The main advantage of trading using opposite Chicago Atlantic and Valeo SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicago Atlantic position performs unexpectedly, Valeo SE 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 Valeo SE will offset losses from the drop in Valeo SE's long position.

The idea behind Chicago Atlantic BDC, and Valeo SE 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.