Correlation Between Bidvest and Valmont Industries
Can any of the company-specific risk be diversified away by investing in both Bidvest and Valmont Industries 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 Bidvest and Valmont Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bidvest Group and Valmont Industries, you can compare the effects of market volatilities on Bidvest and Valmont Industries 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 Bidvest with a short position of Valmont Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bidvest and Valmont Industries.
Diversification Opportunities for Bidvest and Valmont Industries
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bidvest and Valmont is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bidvest Group and Valmont Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valmont Industries and Bidvest 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 Bidvest Group are associated (or correlated) with Valmont Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valmont Industries has no effect on the direction of Bidvest i.e., Bidvest and Valmont Industries go up and down completely randomly.
Pair Corralation between Bidvest and Valmont Industries
Assuming the 90 days horizon Bidvest is expected to generate 1.3 times less return on investment than Valmont Industries. But when comparing it to its historical volatility, Bidvest Group is 1.51 times less risky than Valmont Industries. It trades about 0.02 of its potential returns per unit of risk. Valmont Industries is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 32,742 in Valmont Industries on September 3, 2024 and sell it today you would earn a total of 2,044 from holding Valmont Industries or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 58.99% |
| Values | Daily Returns |
Bidvest Group vs. Valmont Industries
Performance |
| Timeline |
| Bidvest Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Valmont Industries |
Bidvest and Valmont Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bidvest and Valmont Industries
The main advantage of trading using opposite Bidvest and Valmont Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bidvest position performs unexpectedly, Valmont Industries 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 Valmont Industries will offset losses from the drop in Valmont Industries' long position.| Bidvest vs. Valmont Industries | Bidvest vs. Matthews International | Bidvest vs. Griffon | Bidvest vs. Brookfield Business Partners |
| Valmont Industries vs. Matthews International | Valmont Industries vs. Griffon | Valmont Industries vs. Brookfield Business Partners | Valmont Industries vs. MDU Resources Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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