Correlation Between Valero Energy and SSC Technologies

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Can any of the company-specific risk be diversified away by investing in both Valero Energy and SSC Technologies 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 Valero Energy and SSC Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valero Energy Corp and SSC Technologies, you can compare the effects of market volatilities on Valero Energy and SSC Technologies 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 Valero Energy with a short position of SSC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valero Energy and SSC Technologies.

Diversification Opportunities for Valero Energy and SSC Technologies

-0.6
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Valero and SSC Technologies is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Valero Energy Corp and SSC Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Technologies and Valero Energy 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 Valero Energy Corp are associated (or correlated) with SSC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Technologies has no effect on the direction of Valero Energy i.e., Valero Energy and SSC Technologies go up and down completely randomly.

Pair Corralation between Valero Energy and SSC Technologies

Considering the 90-day investment horizon Valero Energy Corp is expected to under-perform the SSC Technologies. In addition to that, Valero Energy is 1.99 times more volatile than SSC Technologies. It trades about -0.19 of its total potential returns per unit of risk. SSC Technologies is currently generating about -0.2 per unit of volatility. If you would invest  6,399  in SSC Technologies on April 1, 2022 and sell it today you would lose (592.00)  from holding SSC Technologies or give up 9.25% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Valero Energy Corp  vs.  SSC Technologies

 Performance (%) 
      Timeline 
Valero Energy Corp 
Valero Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Valero Energy Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Valero Energy may actually be approaching a critical reversion point that can send shares even higher in July 2022.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0337
Payout Ratio
0.6
Last Split Factor
1094:1000
Forward Annual Dividend Rate
3.92
Dividend Date
2022-06-07
Ex Dividend Date
2022-05-11
Last Split Date
2013-05-02

Valero Price Channel

SSC Technologies 
SSC Technologies Performance
0 of 100
Over the last 90 days SSC Technologies 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 somewhat strong which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0136
Payout Ratio
0.15
Last Split Factor
2:1
Forward Annual Dividend Rate
0.8
Dividend Date
2022-06-15
Ex Dividend Date
2022-05-31
Last Split Date
2016-06-27

SSC Technologies Price Channel

Valero Energy and SSC Technologies Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Valero Energy and SSC Technologies

The main advantage of trading using opposite Valero Energy and SSC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valero Energy position performs unexpectedly, SSC Technologies 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 SSC Technologies will offset losses from the drop in SSC Technologies' long position.
The idea behind Valero Energy Corp and SSC Technologies 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.

SSC Technologies

Pair trading matchups for SSC Technologies

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 Transaction History module to view history of all your transactions and understand their impact on performance.

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