Correlation Between Valiant Holding and Daetwyl I

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

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

Diversification Opportunities for Valiant Holding and Daetwyl I

-0.71

Correlation Coefficient

Valiant Holding  Daetwyl I

Pay attention - limited upside

The 3 months correlation between Valiant and Daetwyl is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Valiant Holding AG and Daetwyl I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daetwyl I and Valiant Holding 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 Valiant Holding AG are associated (or correlated) with Daetwyl I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daetwyl I has no effect on the direction of Valiant Holding i.e., Valiant Holding and Daetwyl I go up and down completely randomly.

Pair Corralation between Valiant Holding and Daetwyl I

Assuming the 90 days trading horizon Valiant Holding AG is expected to generate 0.48 times more return on investment than Daetwyl I. However, Valiant Holding AG is 2.08 times less risky than Daetwyl I. It trades about 0.03 of its potential returns per unit of risk. Daetwyl I is currently generating about -0.03 per unit of risk. If you would invest  9,609  in Valiant Holding AG on October 3, 2024 and sell it today you would earn a total of  951.00  from holding Valiant Holding AG or generate 9.9% return on investment over 90 days.

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

Valiant Holding AG  vs.  Daetwyl I

Valiant Holding AG

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valiant Holding AG are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Valiant Holding may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Daetwyl I

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Daetwyl I has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Valiant Holding and Daetwyl I

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

The idea behind Valiant Holding AG and Daetwyl I 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.