Correlation Between Vertiv Holdings and Acuity Brands
Can any of the company-specific risk be diversified away by investing in both Vertiv Holdings and Acuity Brands 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 Vertiv Holdings and Acuity Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vertiv Holdings Co and Acuity Brands, you can compare the effects of market volatilities on Vertiv Holdings and Acuity Brands 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 Vertiv Holdings with a short position of Acuity Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vertiv Holdings and Acuity Brands.
Diversification Opportunities for Vertiv Holdings and Acuity Brands
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vertiv and Acuity is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Vertiv Holdings Co and Acuity Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acuity Brands and Vertiv Holdings 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 Vertiv Holdings Co are associated (or correlated) with Acuity Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acuity Brands has no effect on the direction of Vertiv Holdings i.e., Vertiv Holdings and Acuity Brands go up and down completely randomly.
Pair Corralation between Vertiv Holdings and Acuity Brands
Considering the 90-day investment horizon Vertiv Holdings Co is expected to under-perform the Acuity Brands. In addition to that, Vertiv Holdings is 3.83 times more volatile than Acuity Brands. It trades about -0.01 of its total potential returns per unit of risk. Acuity Brands is currently generating about 0.13 per unit of volatility. If you would invest 31,348 in Acuity Brands on November 9, 2024 and sell it today you would earn a total of 1,524 from holding Acuity Brands or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vertiv Holdings Co vs. Acuity Brands
Performance |
| Timeline |
| Vertiv Holdings |
| Acuity Brands |
Vertiv Holdings and Acuity Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vertiv Holdings and Acuity Brands
The main advantage of trading using opposite Vertiv Holdings and Acuity Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vertiv Holdings position performs unexpectedly, Acuity Brands 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 Acuity Brands will offset losses from the drop in Acuity Brands' long position.| Vertiv Holdings vs. nVent Electric PLC | Vertiv Holdings vs. Hubbell | Vertiv Holdings vs. Advanced Energy Industries | Vertiv Holdings vs. Energizer Holdings |
| Acuity Brands vs. Energizer Holdings | Acuity Brands vs. Espey Mfg Electronics | Acuity Brands vs. Preformed Line Products | Acuity Brands vs. nVent Electric PLC |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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