Correlation Between Vivic Corp and Valmont Industries

Can any of the company-specific risk be diversified away by investing in both Vivic Corp 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 Vivic Corp and Valmont Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vivic Corp and Valmont Industries, you can compare the effects of market volatilities on Vivic Corp 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 Vivic Corp with a short position of Valmont Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vivic Corp and Valmont Industries.

Diversification Opportunities for Vivic Corp and Valmont Industries

-0.51

Correlation Coefficient

Vivic Corp  Valmont Industries

Excellent diversification

The 3 months correlation between Vivic and Valmont is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Vivic Corp and Valmont Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valmont Industries and Vivic Corp 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 Vivic Corp 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 Vivic Corp i.e., Vivic Corp and Valmont Industries go up and down completely randomly.

Pair Corralation between Vivic Corp and Valmont Industries

Given the investment horizon of 90 days Vivic Corp is expected to under-perform the Valmont Industries. In addition to that, Vivic Corp is 6.83 times more volatile than Valmont Industries. It trades about 0.0 of its total potential returns per unit of risk. Valmont Industries is currently generating about 0.05 per unit of volatility. If you would invest  30,552  in Valmont Industries on December 19, 2024 and sell it today you would earn a total of  1,691  from holding Valmont Industries or generate 5.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Vivic Corp  vs.  Valmont Industries

Vivic Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vivic Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Vivic Corp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Valmont Industries

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Valmont Industries are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal primary indicators, Valmont Industries may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Vivic Corp and Valmont Industries

The main advantage of trading using opposite Vivic Corp and Valmont Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vivic Corp 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 Vivic Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.