Correlation Between Valeura Energy and Mccoy Global

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

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

Diversification Opportunities for Valeura Energy and Mccoy Global

-0.46

Correlation Coefficient

Valeura Energy  Mccoy Global

Very good diversification

The 3 months correlation between Valeura and Mccoy is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Valeura Energy and Mccoy Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mccoy Global and Valeura 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 Valeura Energy are associated (or correlated) with Mccoy Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mccoy Global has no effect on the direction of Valeura Energy i.e., Valeura Energy and Mccoy Global go up and down completely randomly.

Pair Corralation between Valeura Energy and Mccoy Global

Assuming the 90 days horizon Valeura Energy is expected to generate 1.22 times more return on investment than Mccoy Global. However, Valeura Energy is 1.22 times more volatile than Mccoy Global. It trades about 0.09 of its potential returns per unit of risk. Mccoy Global is currently generating about 0.07 per unit of risk. If you would invest  226.00  in Valeura Energy on October 3, 2024 and sell it today you would earn a total of  250.00  from holding Valeura Energy or generate 110.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	88.39%
Values	Daily Returns

Valeura Energy  vs.  Mccoy Global

Valeura Energy

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valeura Energy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Valeura Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Mccoy Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mccoy Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Mccoy Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Valeura Energy and Mccoy Global

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

The idea behind Valeura Energy and Mccoy 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.