Correlation Between Vertiv Holdings and Xinjiang Goldwind
Can any of the company-specific risk be diversified away by investing in both Vertiv Holdings and Xinjiang Goldwind 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 Xinjiang Goldwind 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 Xinjiang Goldwind Science, you can compare the effects of market volatilities on Vertiv Holdings and Xinjiang Goldwind 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 Xinjiang Goldwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vertiv Holdings and Xinjiang Goldwind.
Diversification Opportunities for Vertiv Holdings and Xinjiang Goldwind
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vertiv and Xinjiang is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Vertiv Holdings Co and Xinjiang Goldwind Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Goldwind Science 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 Xinjiang Goldwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Goldwind Science has no effect on the direction of Vertiv Holdings i.e., Vertiv Holdings and Xinjiang Goldwind go up and down completely randomly.
Pair Corralation between Vertiv Holdings and Xinjiang Goldwind
Considering the 90-day investment horizon Vertiv Holdings Co is expected to generate 1.82 times more return on investment than Xinjiang Goldwind. However, Vertiv Holdings is 1.82 times more volatile than Xinjiang Goldwind Science. It trades about 0.19 of its potential returns per unit of risk. Xinjiang Goldwind Science is currently generating about -0.09 per unit of risk. If you would invest 10,929 in Vertiv Holdings Co on September 1, 2024 and sell it today you would earn a total of 1,831 from holding Vertiv Holdings Co or generate 16.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vertiv Holdings Co vs. Xinjiang Goldwind Science
Performance |
| Timeline |
| Vertiv Holdings |
| Xinjiang Goldwind Science |
Vertiv Holdings and Xinjiang Goldwind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vertiv Holdings and Xinjiang Goldwind
The main advantage of trading using opposite Vertiv Holdings and Xinjiang Goldwind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vertiv Holdings position performs unexpectedly, Xinjiang Goldwind 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 Xinjiang Goldwind will offset losses from the drop in Xinjiang Goldwind's long position.| Vertiv Holdings vs. nVent Electric PLC | Vertiv Holdings vs. Hubbell | Vertiv Holdings vs. Advanced Energy Industries | Vertiv Holdings vs. Energizer Holdings |
| Xinjiang Goldwind vs. Shanghai Electric Group | Xinjiang Goldwind vs. American Superconductor | Xinjiang Goldwind vs. Cummins |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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