Correlation Between Lionheart Holdings and Valmont Industries

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

Diversification Opportunities for Lionheart Holdings and Valmont Industries

LionheartValmontDiversified AwayLionheartValmontDiversified Away100%
-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between Lionheart and Valmont is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Lionheart Holdings and Valmont Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valmont Industries and Lionheart Holdings 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 Lionheart Holdings 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 Lionheart Holdings i.e., Lionheart Holdings and Valmont Industries go up and down completely randomly.

Pair Corralation between Lionheart Holdings and Valmont Industries

Considering the 90-day investment horizon Lionheart Holdings is expected to generate 5.96 times less return on investment than Valmont Industries. But when comparing it to its historical volatility, Lionheart Holdings is 42.39 times less risky than Valmont Industries. It trades about 0.28 of its potential returns per unit of risk. Valmont Industries is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  34,248  in Valmont Industries on November 25, 2024 and sell it today you would earn a total of  660.00  from holding Valmont Industries or generate 1.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Lionheart Holdings  vs.  Valmont Industries

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50
JavaScript chart by amCharts 3.21.15CUB VMI
       Timeline  
Lionheart Holdings 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Lionheart Holdings are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Lionheart Holdings is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb10.110.210.310.410.5
Valmont Industries 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Valmont Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, Valmont Industries is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb300310320330340350360370380

Lionheart Holdings and Valmont Industries Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.18-0.0837-0.0562-0.0288-0.0014410.02590.05620.0850.20.41 5101520253035
JavaScript chart by amCharts 3.21.15CUB VMI
       Returns  

Pair Trading with Lionheart Holdings and Valmont Industries

The main advantage of trading using opposite Lionheart Holdings and Valmont Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lionheart Holdings 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.
The idea behind Lionheart Holdings and Valmont Industries 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.
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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