Correlation Between Vertiv Holdings and BICO Group
Can any of the company-specific risk be diversified away by investing in both Vertiv Holdings and BICO Group 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 BICO Group 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 BICO Group AB, you can compare the effects of market volatilities on Vertiv Holdings and BICO Group 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 BICO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vertiv Holdings and BICO Group.
Diversification Opportunities for Vertiv Holdings and BICO Group
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vertiv and BICO is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Vertiv Holdings Co and BICO Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BICO Group AB 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 BICO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BICO Group AB has no effect on the direction of Vertiv Holdings i.e., Vertiv Holdings and BICO Group go up and down completely randomly.
Pair Corralation between Vertiv Holdings and BICO Group
Considering the 90-day investment horizon Vertiv Holdings Co is expected to generate 1.5 times more return on investment than BICO Group. However, Vertiv Holdings is 1.5 times more volatile than BICO Group AB. It trades about 0.08 of its potential returns per unit of risk. BICO Group AB is currently generating about -0.02 per unit of risk. If you would invest 9,606 in Vertiv Holdings Co on September 1, 2024 and sell it today you would earn a total of 3,154 from holding Vertiv Holdings Co or generate 32.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Vertiv Holdings Co vs. BICO Group AB
Performance |
| Timeline |
| Vertiv Holdings |
| BICO Group AB |
Vertiv Holdings and BICO Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vertiv Holdings and BICO Group
The main advantage of trading using opposite Vertiv Holdings and BICO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vertiv Holdings position performs unexpectedly, BICO Group 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 BICO Group will offset losses from the drop in BICO Group's long position.| Vertiv Holdings vs. nVent Electric PLC | Vertiv Holdings vs. Hubbell | Vertiv Holdings vs. Advanced Energy Industries | Vertiv Holdings vs. Energizer Holdings |
| BICO Group vs. Anteris Technologies | BICO Group vs. Brain Scientific | BICO Group vs. Aurora Spine | BICO Group vs. Tenon Medical |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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