Correlation Between ChampionX and Valaris

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

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

Diversification Opportunities for ChampionX and Valaris

0.49

Correlation Coefficient

ChampionX  Valaris

Very weak diversification

The 3 months correlation between ChampionX and Valaris is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Valaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valaris and ChampionX 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 ChampionX are associated (or correlated) with Valaris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valaris has no effect on the direction of ChampionX i.e., ChampionX and Valaris go up and down completely randomly.

Pair Corralation between ChampionX and Valaris

Considering the 90-day investment horizon ChampionX is expected to generate 3.38 times less return on investment than Valaris. But when comparing it to its historical volatility, ChampionX is 1.43 times less risky than Valaris. It trades about 0.06 of its potential returns per unit of risk. Valaris is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  3,548  in Valaris on May 5, 2025 and sell it today you would earn a total of  980.00  from holding Valaris or generate 27.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	79.37%
Values	Daily Returns

ChampionX  vs.  Valaris

ChampionX

Risk-Adjusted Performance

Modest

Over the last 90 days ChampionX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly conflicting technical indicators, ChampionX may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Valaris

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valaris are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Valaris disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ChampionX and Valaris

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

The idea behind ChampionX and Valaris 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.