Correlation Between Shoals Technologies and Vertiv Holdings
Can any of the company-specific risk be diversified away by investing in both Shoals Technologies and Vertiv 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 Shoals Technologies and Vertiv Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shoals Technologies Group and Vertiv Holdings Co, you can compare the effects of market volatilities on Shoals Technologies and Vertiv 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 Shoals Technologies with a short position of Vertiv Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoals Technologies and Vertiv Holdings.
Diversification Opportunities for Shoals Technologies and Vertiv Holdings
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shoals and Vertiv is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Shoals Technologies Group and Vertiv Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vertiv Holdings and Shoals Technologies 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 Shoals Technologies Group are associated (or correlated) with Vertiv Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vertiv Holdings has no effect on the direction of Shoals Technologies i.e., Shoals Technologies and Vertiv Holdings go up and down completely randomly.
Pair Corralation between Shoals Technologies and Vertiv Holdings
Given the investment horizon of 90 days Shoals Technologies Group is expected to under-perform the Vertiv Holdings. In addition to that, Shoals Technologies is 1.95 times more volatile than Vertiv Holdings Co. It trades about -0.06 of its total potential returns per unit of risk. Vertiv Holdings Co is currently generating about 0.23 per unit of volatility. If you would invest 12,004 in Vertiv Holdings Co on October 21, 2024 and sell it today you would earn a total of 1,584 from holding Vertiv Holdings Co or generate 13.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shoals Technologies Group vs. Vertiv Holdings Co
Performance |
| Timeline |
| Shoals Technologies |
| Vertiv Holdings |
Shoals Technologies and Vertiv Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoals Technologies and Vertiv Holdings
The main advantage of trading using opposite Shoals Technologies and Vertiv Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoals Technologies position performs unexpectedly, Vertiv 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 Vertiv Holdings will offset losses from the drop in Vertiv Holdings' long position.| Shoals Technologies vs. Array Technologies | Shoals Technologies vs. Sunnova Energy International | Shoals Technologies vs. Fluence Energy | Shoals Technologies vs. Playtika Holding Corp |
| Vertiv Holdings vs. nVent Electric PLC | Vertiv Holdings vs. Hubbell | Vertiv Holdings vs. Advanced Energy Industries | Vertiv Holdings vs. Energizer Holdings |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |