Correlation Between BAIDU and Vertiv Holdings
Specify exactly 2 symbols:
By analyzing existing cross correlation between BAIDU INC 3625 and Vertiv Holdings Co, you can compare the effects of market volatilities on BAIDU 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 BAIDU with a short position of Vertiv Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAIDU and Vertiv Holdings.
Diversification Opportunities for BAIDU and Vertiv Holdings
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BAIDU and Vertiv is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding BAIDU INC 3625 and Vertiv Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vertiv Holdings and BAIDU 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 BAIDU INC 3625 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 BAIDU i.e., BAIDU and Vertiv Holdings go up and down completely randomly.
Pair Corralation between BAIDU and Vertiv Holdings
Assuming the 90 days trading horizon BAIDU is expected to generate 4.99 times less return on investment than Vertiv Holdings. But when comparing it to its historical volatility, BAIDU INC 3625 is 10.62 times less risky than Vertiv Holdings. It trades about 0.16 of its potential returns per unit of risk. Vertiv Holdings Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9,606 in Vertiv Holdings Co on August 30, 2024 and sell it today you would earn a total of 3,088 from holding Vertiv Holdings Co or generate 32.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 23.81% |
| Values | Daily Returns |
BAIDU INC 3625 vs. Vertiv Holdings Co
Performance |
| Timeline |
| BAIDU INC 3625 |
| Vertiv Holdings |
BAIDU and Vertiv Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAIDU and Vertiv Holdings
The main advantage of trading using opposite BAIDU and Vertiv Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAIDU 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.The idea behind BAIDU INC 3625 and Vertiv Holdings Co 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.| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |