Correlation Between Valiant Holding and Helvetia Holding

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

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

Diversification Opportunities for Valiant Holding and Helvetia Holding

0.43

Correlation Coefficient

Valiant Holding  Helvetia Holding

Very weak diversification

The 3 months correlation between Valiant and Helvetia is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Valiant Holding AG and Helvetia Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helvetia Holding and Valiant Holding 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 Valiant Holding AG are associated (or correlated) with Helvetia Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helvetia Holding has no effect on the direction of Valiant Holding i.e., Valiant Holding and Helvetia Holding go up and down completely randomly.

Pair Corralation between Valiant Holding and Helvetia Holding

Assuming the 90 days trading horizon Valiant Holding AG is expected to generate 0.97 times more return on investment than Helvetia Holding. However, Valiant Holding AG is 1.03 times less risky than Helvetia Holding. It trades about 0.09 of its potential returns per unit of risk. Helvetia Holding AG is currently generating about 0.05 per unit of risk. If you would invest  9,940  in Valiant Holding AG on September 28, 2024 and sell it today you would earn a total of  440.00  from holding Valiant Holding AG or generate 4.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Valiant Holding AG  vs.  Helvetia Holding AG

Valiant Holding AG

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Valiant Holding AG are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Valiant Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Helvetia Holding

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Helvetia Holding AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Helvetia Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Valiant Holding and Helvetia Holding

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

The idea behind Valiant Holding AG and Helvetia Holding AG 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.