Correlation Between Vertiv Holdings and Big Ridge

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

Diversification Opportunities for Vertiv Holdings and Big Ridge

0.62

Correlation Coefficient

Vertiv Holdings  Big Ridge

Poor diversification

The 3 months correlation between Vertiv and Big is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Vertiv Holdings Co and Big Ridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Ridge Gold 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 Big Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Ridge Gold has no effect on the direction of Vertiv Holdings i.e., Vertiv Holdings and Big Ridge go up and down completely randomly.

Pair Corralation between Vertiv Holdings and Big Ridge

Considering the 90-day investment horizon Vertiv Holdings Co is expected to under-perform the Big Ridge. But the stock apears to be less risky and, when comparing its historical volatility, Vertiv Holdings Co is 1.27 times less risky than Big Ridge. The stock trades about -0.08 of its potential returns per unit of risk. The Big Ridge Gold is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  7.00  in Big Ridge Gold on December 28, 2024 and sell it today you would lose (1.80) from holding Big Ridge Gold or give up 25.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Vertiv Holdings Co  vs.  Big Ridge Gold

Vertiv Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vertiv Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Big Ridge Gold

Risk-Adjusted Performance

Very Weak

Over the last 90 days Big Ridge Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Vertiv Holdings and Big Ridge

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

The idea behind Vertiv Holdings Co and Big Ridge Gold 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.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.