Correlation Between Vertiv Holdings and Exro Technologies
Can any of the company-specific risk be diversified away by investing in both Vertiv Holdings and Exro Technologies 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 Exro Technologies 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 Exro Technologies, you can compare the effects of market volatilities on Vertiv Holdings and Exro Technologies 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 Exro Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vertiv Holdings and Exro Technologies.
Diversification Opportunities for Vertiv Holdings and Exro Technologies
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vertiv and Exro is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Vertiv Holdings Co and Exro Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exro Technologies 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 Exro Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exro Technologies has no effect on the direction of Vertiv Holdings i.e., Vertiv Holdings and Exro Technologies go up and down completely randomly.
Pair Corralation between Vertiv Holdings and Exro Technologies
Considering the 90-day investment horizon Vertiv Holdings is expected to generate 1.4 times less return on investment than Exro Technologies. But when comparing it to its historical volatility, Vertiv Holdings Co is 2.8 times less risky than Exro Technologies. It trades about 0.19 of its potential returns per unit of risk. Exro Technologies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Exro Technologies on August 27, 2024 and sell it today you would earn a total of 1.00 from holding Exro Technologies or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vertiv Holdings Co vs. Exro Technologies
Performance |
| Timeline |
| Vertiv Holdings |
| Exro Technologies |
Vertiv Holdings and Exro Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vertiv Holdings and Exro Technologies
The main advantage of trading using opposite Vertiv Holdings and Exro Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vertiv Holdings position performs unexpectedly, Exro Technologies 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 Exro Technologies will offset losses from the drop in Exro Technologies' long position.| Vertiv Holdings vs. nVent Electric PLC | Vertiv Holdings vs. Hubbell | Vertiv Holdings vs. Advanced Energy Industries | Vertiv Holdings vs. Energizer Holdings |
| Exro Technologies vs. Novonix Ltd ADR | Exro Technologies vs. Magnis Energy Technologies | Exro Technologies vs. Ilika plc | Exro Technologies vs. FuelPositive Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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