Correlation Between Roper Technologies and United Internet
Can any of the company-specific risk be diversified away by investing in both Roper Technologies and United Internet 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 Roper Technologies and United Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roper Technologies and United Internet AG, you can compare the effects of market volatilities on Roper Technologies and United Internet 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 Roper Technologies with a short position of United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roper Technologies and United Internet.
Diversification Opportunities for Roper Technologies and United Internet
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Roper and United is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Roper Technologies and United Internet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Internet AG and Roper Technologies 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 Roper Technologies are associated (or correlated) with United Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Internet AG has no effect on the direction of Roper Technologies i.e., Roper Technologies and United Internet go up and down completely randomly.
Pair Corralation between Roper Technologies and United Internet
Assuming the 90 days trading horizon Roper Technologies is expected to generate 0.46 times more return on investment than United Internet. However, Roper Technologies is 2.19 times less risky than United Internet. It trades about 0.04 of its potential returns per unit of risk. United Internet AG is currently generating about -0.12 per unit of risk. If you would invest 54,903 in Roper Technologies on August 30, 2024 and sell it today you would earn a total of 1,414 from holding Roper Technologies or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roper Technologies vs. United Internet AG
Performance |
| Timeline |
| Roper Technologies |
| United Internet AG |
Roper Technologies and United Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roper Technologies and United Internet
The main advantage of trading using opposite Roper Technologies and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roper Technologies position performs unexpectedly, United Internet 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 United Internet will offset losses from the drop in United Internet's long position.| Roper Technologies vs. Lendinvest PLC | Roper Technologies vs. Neometals | Roper Technologies vs. Albion Technology General | Roper Technologies vs. Jupiter Fund Management |
| United Internet vs. Lendinvest PLC | United Internet vs. Neometals | United Internet vs. Albion Technology General | United Internet vs. Jupiter Fund Management |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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