Correlation Between Astrana Health and Valens

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

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

Diversification Opportunities for Astrana Health and Valens

0.05

Correlation Coefficient

Astrana Health  Valens

Significant diversification

The 3 months correlation between Astrana and Valens is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Astrana Health and Valens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valens and Astrana Health 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 Astrana Health are associated (or correlated) with Valens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valens has no effect on the direction of Astrana Health i.e., Astrana Health and Valens go up and down completely randomly.

Pair Corralation between Astrana Health and Valens

Given the investment horizon of 90 days Astrana Health is expected to under-perform the Valens. But the stock apears to be less risky and, when comparing its historical volatility, Astrana Health is 1.32 times less risky than Valens. The stock trades about -0.21 of its potential returns per unit of risk. The Valens is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  225.00  in Valens on September 26, 2024 and sell it today you would lose (33.00) from holding Valens or give up 14.67% of portfolio value over 90 days.

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

Astrana Health  vs.  Valens

Astrana Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astrana Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 weak 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.

Pair Trading with Astrana Health and Valens

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

The idea behind Astrana Health and Valens 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.