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Correlation Between Wells Fargo and Valero Energy

Analyzing existing cross correlation between Wells Fargo Company and Valero Energy Corporation. You can compare the effects of market volatilities on Wells Fargo and Valero 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 Wells Fargo with a short position of Valero Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and Valero Energy.

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Diversification Opportunities for Wells Fargo and Valero Energy

Wells Fargo Company diversification synergy
0.88
<div class='circular--portrait-small' style='background:#FF9E01;color: white;font-size:1.1em;padding-top: 12px;;'>WFC</div>
<div class='circular--portrait-small' style='background:#0D8ECF;color: white;font-size:1.1em;padding-top: 12px;;'>VLO</div>

Very poor diversification

The 3 months correlation between Wells and Valero is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Wells Fargo Company and Valero Energy Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Valero Energy and Wells Fargo 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 Wells Fargo Company are associated (or correlated) with Valero Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valero Energy has no effect on the direction of Wells Fargo i.e. Wells Fargo and Valero Energy go up and down completely randomly.

Pair Corralation between Wells Fargo and Valero Energy

Considering 30-days investment horizon, Wells Fargo Company is expected to under-perform the Valero Energy. But the stock apears to be less risky and, when comparing its historical volatility, Wells Fargo Company is 1.36 times less risky than Valero Energy. The stock trades about -0.19 of its potential returns per unit of risk. The Valero Energy Corporation is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  9,751  in Valero Energy Corporation on January 21, 2020 and sell it today you would lose (1,290)  from holding Valero Energy Corporation or give up 13.23% of portfolio value over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy98.39%
ValuesDaily Returns

Wells Fargo Company  vs.  Valero Energy Corp.

 Performance (%) 
    
  Timeline 
Wells Fargo 
00

Risk-Adjusted Performance

Over the last 30 days Wells Fargo Company 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 March 2020. The current disturbance may also be a sign of long term up-swing for the company investors.
Valero Energy 
00

Risk-Adjusted Performance

Over the last 30 days Valero Energy Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Allthough weak performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in March 2020. The existing mess may also be a sign of long standing up-swing for the corporation partners.

Wells Fargo and Valero Energy Volatility Contrast

 Predicted Return Density 
    
  Returns 
Check out your portfolio center. Please also try Price Ceiling Movement module to calculate and plot price ceiling movement for different equity instruments.