Correlation Between Vertiv Holdings and Melexis NV
Can any of the company-specific risk be diversified away by investing in both Vertiv Holdings and Melexis NV 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 Melexis NV 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 Melexis NV, you can compare the effects of market volatilities on Vertiv Holdings and Melexis NV 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 Melexis NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vertiv Holdings and Melexis NV.
Diversification Opportunities for Vertiv Holdings and Melexis NV
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vertiv and Melexis is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Vertiv Holdings Co and Melexis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melexis NV 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 Melexis NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melexis NV has no effect on the direction of Vertiv Holdings i.e., Vertiv Holdings and Melexis NV go up and down completely randomly.
Pair Corralation between Vertiv Holdings and Melexis NV
Considering the 90-day investment horizon Vertiv Holdings Co is expected to generate 1.35 times more return on investment than Melexis NV. However, Vertiv Holdings is 1.35 times more volatile than Melexis NV. It trades about 0.08 of its potential returns per unit of risk. Melexis NV is currently generating about -0.08 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. Melexis NV
Performance |
| Timeline |
| Vertiv Holdings |
| Melexis NV |
Vertiv Holdings and Melexis NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vertiv Holdings and Melexis NV
The main advantage of trading using opposite Vertiv Holdings and Melexis NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vertiv Holdings position performs unexpectedly, Melexis NV 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 Melexis NV will offset losses from the drop in Melexis NV's long position.| Vertiv Holdings vs. nVent Electric PLC | Vertiv Holdings vs. Hubbell | Vertiv Holdings vs. Advanced Energy Industries | Vertiv Holdings vs. Energizer Holdings |
| Melexis NV vs. Power Integrations | Melexis NV vs. MACOM Technology Solutions | Melexis NV vs. Intchains Group Limited | Melexis NV vs. Vishay Intertechnology |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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