Correlation Between Maxeon Solar and Valmont Industries
Can any of the company-specific risk be diversified away by investing in both Maxeon Solar 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 Maxeon Solar and Valmont Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maxeon Solar Technologies and Valmont Industries, you can compare the effects of market volatilities on Maxeon Solar 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 Maxeon Solar with a short position of Valmont Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxeon Solar and Valmont Industries.
Diversification Opportunities for Maxeon Solar and Valmont Industries
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Maxeon and Valmont is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Maxeon Solar Technologies and Valmont Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valmont Industries and Maxeon Solar 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 Maxeon Solar Technologies 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 Maxeon Solar i.e., Maxeon Solar and Valmont Industries go up and down completely randomly.
Pair Corralation between Maxeon Solar and Valmont Industries
Given the investment horizon of 90 days Maxeon Solar Technologies is expected to generate 6.62 times more return on investment than Valmont Industries. However, Maxeon Solar is 6.62 times more volatile than Valmont Industries. It trades about 0.06 of its potential returns per unit of risk. Valmont Industries is currently generating about 0.28 per unit of risk. If you would invest 864.00 in Maxeon Solar Technologies on August 31, 2024 and sell it today you would earn a total of 16.00 from holding Maxeon Solar Technologies or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maxeon Solar Technologies vs. Valmont Industries
Performance |
| Timeline |
| Maxeon Solar Technologies |
| Valmont Industries |
Maxeon Solar and Valmont Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maxeon Solar and Valmont Industries
The main advantage of trading using opposite Maxeon Solar and Valmont Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxeon Solar 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.| Maxeon Solar vs. Sunrun Inc | Maxeon Solar vs. Canadian Solar | Maxeon Solar vs. First Solar | Maxeon Solar vs. Sunnova Energy International |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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