Correlation Between Valley National and Broadwind Energy
Can any of the company-specific risk be diversified away by investing in both Valley National and Broadwind Energy 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 Valley National and Broadwind Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valley National Bancorp and Broadwind Energy, you can compare the effects of market volatilities on Valley National and Broadwind Energy 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 Valley National with a short position of Broadwind Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valley National and Broadwind Energy.
Diversification Opportunities for Valley National and Broadwind Energy
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valley and Broadwind is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Valley National Bancorp and Broadwind Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadwind Energy and Valley National 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 Valley National Bancorp are associated (or correlated) with Broadwind Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadwind Energy has no effect on the direction of Valley National i.e., Valley National and Broadwind Energy go up and down completely randomly.
Pair Corralation between Valley National and Broadwind Energy
Assuming the 90 days horizon Valley National Bancorp is expected to generate 0.12 times more return on investment than Broadwind Energy. However, Valley National Bancorp is 8.5 times less risky than Broadwind Energy. It trades about 0.09 of its potential returns per unit of risk. Broadwind Energy is currently generating about -0.01 per unit of risk. If you would invest 2,486 in Valley National Bancorp on August 14, 2025 and sell it today you would earn a total of 62.00 from holding Valley National Bancorp or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Valley National Bancorp vs. Broadwind Energy
Performance |
| Timeline |
| Valley National Bancorp |
| Broadwind Energy |
Valley National and Broadwind Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valley National and Broadwind Energy
The main advantage of trading using opposite Valley National and Broadwind Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valley National position performs unexpectedly, Broadwind Energy 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 Broadwind Energy will offset losses from the drop in Broadwind Energy's long position.| Valley National vs. Banco Macro SA | Valley National vs. Home BancShares | Valley National vs. FNB Corp | Valley National vs. Columbia Banking System |
| Broadwind Energy vs. NET Power | Broadwind Energy vs. Wabash National | Broadwind Energy vs. Titan Machinery | Broadwind Energy vs. Luxfer Holdings PLC |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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