Correlation Between Valens and Getty Copper

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

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

Diversification Opportunities for Valens and Getty Copper

0.0

Correlation Coefficient

Valens  Getty Copper

Pay attention - limited upside

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

Pair Corralation between Valens and Getty Copper

Considering the 90-day investment horizon Valens is expected to under-perform the Getty Copper. But the stock apears to be less risky and, when comparing its historical volatility, Valens is 2.05 times less risky than Getty Copper. The stock trades about -0.03 of its potential returns per unit of risk. The Getty Copper is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2.30  in Getty Copper on September 24, 2024 and sell it today you would earn a total of  2.58  from holding Getty Copper or generate 112.17% return on investment over 90 days.

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

Valens  vs.  Getty Copper

Valens

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Valens has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Getty Copper

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Valens and Getty Copper

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

The idea behind Valens and Getty Copper 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.