Correlation Between QuickLogic and Valens

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

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

Diversification Opportunities for QuickLogic and Valens

0.03

Correlation Coefficient

QuickLogic  Valens

Significant diversification

The 3 months correlation between QuickLogic and Valens is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding QuickLogic and Valens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valens and QuickLogic 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 QuickLogic 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 QuickLogic i.e., QuickLogic and Valens go up and down completely randomly.

Pair Corralation between QuickLogic and Valens

Given the investment horizon of 90 days QuickLogic is expected to generate 1.07 times more return on investment than Valens. However, QuickLogic is 1.07 times more volatile than Valens. It trades about 0.04 of its potential returns per unit of risk. Valens is currently generating about -0.03 per unit of risk. If you would invest  525.00  in QuickLogic on September 2, 2024 and sell it today you would earn a total of  238.00  from holding QuickLogic or generate 45.33% return on investment over 90 days.

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

QuickLogic  vs.  Valens

QuickLogic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QuickLogic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, QuickLogic is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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 very healthy essential indicators, Valens is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with QuickLogic and Valens

The main advantage of trading using opposite QuickLogic and Valens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QuickLogic 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 QuickLogic 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.