Correlation Between Vertiv Holdings and Cantex Mine

Can any of the company-specific risk be diversified away by investing in both Vertiv Holdings and Cantex Mine 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 Cantex Mine 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 Cantex Mine Development, you can compare the effects of market volatilities on Vertiv Holdings and Cantex Mine 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 Cantex Mine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vertiv Holdings and Cantex Mine.

Diversification Opportunities for Vertiv Holdings and Cantex Mine

-0.48

Correlation Coefficient

Vertiv Holdings  Cantex Mine

Very good diversification

The 3 months correlation between Vertiv and Cantex is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Vertiv Holdings Co and Cantex Mine Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantex Mine Development 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 Cantex Mine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantex Mine Development has no effect on the direction of Vertiv Holdings i.e., Vertiv Holdings and Cantex Mine go up and down completely randomly.

Pair Corralation between Vertiv Holdings and Cantex Mine

Considering the 90-day investment horizon Vertiv Holdings Co is expected to generate 0.51 times more return on investment than Cantex Mine. However, Vertiv Holdings Co is 1.96 times less risky than Cantex Mine. It trades about 0.27 of its potential returns per unit of risk. Cantex Mine Development is currently generating about -0.02 per unit of risk. If you would invest  7,518  in Vertiv Holdings Co on August 31, 2024 and sell it today you would earn a total of  5,176  from holding Vertiv Holdings Co or generate 68.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Vertiv Holdings Co  vs.  Cantex Mine Development

Vertiv Holdings

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vertiv Holdings Co are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Vertiv Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cantex Mine Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cantex Mine Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Vertiv Holdings and Cantex Mine

The main advantage of trading using opposite Vertiv Holdings and Cantex Mine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vertiv Holdings position performs unexpectedly, Cantex Mine 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 Cantex Mine will offset losses from the drop in Cantex Mine's long position.

The idea behind Vertiv Holdings Co and Cantex Mine Development pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.