Correlation Between Valero Energy and MEDTECH GLOBAL

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

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

Diversification Opportunities for Valero Energy and MEDTECH GLOBAL

0.0

Correlation Coefficient

Valero Energy  MEDTECH GLOBAL

Pay attention - limited upside

The 3 months correlation between Valero and MEDTECH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Valero Energy Corp and MEDTECH GLOBAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDTECH GLOBAL and Valero Energy 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 Valero Energy Corp are associated (or correlated) with MEDTECH GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDTECH GLOBAL has no effect on the direction of Valero Energy i.e., Valero Energy and MEDTECH GLOBAL go up and down completely randomly.

Pair Corralation between Valero Energy and MEDTECH GLOBAL

If you would invest (100.00) in MEDTECH GLOBAL on October 22, 2024 and sell it today you would earn a total of  100.00  from holding MEDTECH GLOBAL or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Valero Energy Corp  vs.  MEDTECH GLOBAL

Valero Energy Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Valero Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Valero Energy is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

MEDTECH GLOBAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDTECH GLOBAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, MEDTECH GLOBAL is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Valero Energy and MEDTECH GLOBAL

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

The idea behind Valero Energy Corp and MEDTECH GLOBAL 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.