Correlation Between Vertiv Holdings and Rockdale Resources

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

Diversification Opportunities for Vertiv Holdings and Rockdale Resources

-0.72

Correlation Coefficient

Vertiv Holdings  Rockdale Resources

Pay attention - limited upside

The 3 months correlation between Vertiv and Rockdale is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vertiv Holdings Co and Rockdale Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockdale Resources Corp 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 Rockdale Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockdale Resources Corp has no effect on the direction of Vertiv Holdings i.e., Vertiv Holdings and Rockdale Resources go up and down completely randomly.

Pair Corralation between Vertiv Holdings and Rockdale Resources

Considering the 90-day investment horizon Vertiv Holdings Co is expected to generate 0.39 times more return on investment than Rockdale Resources. However, Vertiv Holdings Co is 2.55 times less risky than Rockdale Resources. It trades about 0.08 of its potential returns per unit of risk. Rockdale Resources Corp is currently generating about -0.1 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	78.57%
Values	Daily Returns

Vertiv Holdings Co  vs.  Rockdale Resources Corp

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.

Rockdale Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rockdale Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Vertiv Holdings and Rockdale Resources

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

The idea behind Vertiv Holdings Co and Rockdale Resources Corp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.