Correlation Between Valmont Industries and Mytilineos Holdings
Can any of the company-specific risk be diversified away by investing in both Valmont Industries and Mytilineos Holdings 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 Mytilineos Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valmont Industries and Mytilineos Holdings SA, you can compare the effects of market volatilities on Valmont Industries and Mytilineos Holdings 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 Mytilineos Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valmont Industries and Mytilineos Holdings.
Diversification Opportunities for Valmont Industries and Mytilineos Holdings
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valmont and Mytilineos is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Valmont Industries and Mytilineos Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mytilineos Holdings 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 Mytilineos Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mytilineos Holdings has no effect on the direction of Valmont Industries i.e., Valmont Industries and Mytilineos Holdings go up and down completely randomly.
Pair Corralation between Valmont Industries and Mytilineos Holdings
Considering the 90-day investment horizon Valmont Industries is expected to generate 7.95 times less return on investment than Mytilineos Holdings. But when comparing it to its historical volatility, Valmont Industries is 2.46 times less risky than Mytilineos Holdings. It trades about 0.02 of its potential returns per unit of risk. Mytilineos Holdings SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,975 in Mytilineos Holdings SA on August 25, 2024 and sell it today you would earn a total of 1,348 from holding Mytilineos Holdings SA or generate 68.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.45% |
| Values | Daily Returns |
Valmont Industries vs. Mytilineos Holdings SA
Performance |
| Timeline |
| Valmont Industries |
| Mytilineos Holdings |
Valmont Industries and Mytilineos Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valmont Industries and Mytilineos Holdings
The main advantage of trading using opposite Valmont Industries and Mytilineos Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valmont Industries position performs unexpectedly, Mytilineos Holdings 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 Mytilineos Holdings will offset losses from the drop in Mytilineos Holdings' long position.| Valmont Industries vs. Matthews International | Valmont Industries vs. Griffon | Valmont Industries vs. Brookfield Business Partners | Valmont Industries vs. MDU Resources Group |
| Mytilineos Holdings vs. Honeywell International | Mytilineos Holdings vs. MDU Resources Group | Mytilineos Holdings vs. Compass Diversified Holdings | Mytilineos Holdings vs. Valmont Industries |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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