Correlation Between Valmont Industries and Nexus Gold

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

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

Diversification Opportunities for Valmont Industries and Nexus Gold

0.21

Correlation Coefficient

Valmont Industries  Nexus Gold

Modest diversification

The 3 months correlation between Valmont and Nexus is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Valmont Industries and Nexus Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexus Gold Corp 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 Nexus Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexus Gold Corp has no effect on the direction of Valmont Industries i.e., Valmont Industries and Nexus Gold go up and down completely randomly.

Pair Corralation between Valmont Industries and Nexus Gold

If you would invest  29,377  in Valmont Industries on October 6, 2024 and sell it today you would earn a total of  1,604  from holding Valmont Industries or generate 5.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.61%
Values	Daily Returns

Valmont Industries  vs.  Nexus Gold Corp

Valmont Industries

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Valmont Industries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak primary indicators, Valmont Industries may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Nexus Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Valmont Industries and Nexus Gold

The main advantage of trading using opposite Valmont Industries and Nexus Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valmont Industries position performs unexpectedly, Nexus Gold 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 Nexus Gold will offset losses from the drop in Nexus Gold's long position.

The idea behind Valmont Industries and Nexus Gold Corp 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.