Correlation Between Valens and PAO NOVATEK

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

By analyzing existing cross correlation between Valens and PAO NOVATEK, you can compare the effects of market volatilities on Valens and PAO NOVATEK 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 PAO NOVATEK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valens and PAO NOVATEK.

Diversification Opportunities for Valens and PAO NOVATEK

0.0

Correlation Coefficient

Valens  PAO NOVATEK

Pay attention - limited upside

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

Pair Corralation between Valens and PAO NOVATEK

If you would invest  180.00  in Valens on October 20, 2024 and sell it today you would earn a total of  155.00  from holding Valens or generate 86.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Valens  vs.  PAO NOVATEK

Valens

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valens are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile essential indicators, Valens displayed solid returns over the last few months and may actually be approaching a breakup point.

PAO NOVATEK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PAO NOVATEK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, PAO NOVATEK is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Valens and PAO NOVATEK

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

The idea behind Valens and PAO NOVATEK 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.