Correlation Between Valens and Astrana Health
Can any of the company-specific risk be diversified away by investing in both Valens and Astrana Health 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 Astrana Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valens and Astrana Health, you can compare the effects of market volatilities on Valens and Astrana Health 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 Astrana Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valens and Astrana Health.
Diversification Opportunities for Valens and Astrana Health
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Valens and Astrana is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Valens and Astrana Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astrana Health 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 Astrana Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astrana Health has no effect on the direction of Valens i.e., Valens and Astrana Health go up and down completely randomly.
Pair Corralation between Valens and Astrana Health
Considering the 90-day investment horizon Valens is expected to generate 1.32 times more return on investment than Astrana Health. However, Valens is 1.32 times more volatile than Astrana Health. It trades about -0.03 of its potential returns per unit of risk. Astrana Health is currently generating about -0.21 per unit of risk. 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 |
Valens vs. Astrana Health
Performance |
Timeline |
Valens |
Astrana Health |
Valens and Astrana Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Valens and Astrana Health
The main advantage of trading using opposite Valens and Astrana Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valens position performs unexpectedly, Astrana Health 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 Astrana Health will offset losses from the drop in Astrana Health's long position.The idea behind Valens and Astrana Health 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.Astrana Health vs. EvoAir Holdings | Astrana Health vs. Pentair PLC | Astrana Health vs. Morgan Stanley | Astrana Health vs. Papaya Growth Opportunity |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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