Correlation Between Valmont Industries and Coty
Can any of the company-specific risk be diversified away by investing in both Valmont Industries and Coty 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 Valmont Industries and Coty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valmont Industries and Coty Inc, you can compare the effects of market volatilities on Valmont Industries and Coty 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 Valmont Industries with a short position of Coty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valmont Industries and Coty.
Diversification Opportunities for Valmont Industries and Coty
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Valmont and Coty is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Valmont Industries and Coty Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coty Inc and Valmont Industries 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 Valmont Industries are associated (or correlated) with Coty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coty Inc has no effect on the direction of Valmont Industries i.e., Valmont Industries and Coty go up and down completely randomly.
Pair Corralation between Valmont Industries and Coty
Considering the 90-day investment horizon Valmont Industries is expected to generate 1.03 times more return on investment than Coty. However, Valmont Industries is 1.03 times more volatile than Coty Inc. It trades about 0.01 of its potential returns per unit of risk. Coty Inc is currently generating about -0.04 per unit of risk. If you would invest 32,005 in Valmont Industries on November 7, 2024 and sell it today you would earn a total of 614.00 from holding Valmont Industries or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valmont Industries vs. Coty Inc
Performance |
| Timeline |
| Valmont Industries |
| Coty Inc |
Valmont Industries and Coty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valmont Industries and Coty
The main advantage of trading using opposite Valmont Industries and Coty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valmont Industries position performs unexpectedly, Coty 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 Coty will offset losses from the drop in Coty's long position.| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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