Correlation Between Roper Technologies and Global Net
Can any of the company-specific risk be diversified away by investing in both Roper Technologies and Global Net 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 Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roper Technologies and Global Net Lease, you can compare the effects of market volatilities on Roper Technologies and Global Net 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 Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roper Technologies and Global Net.
Diversification Opportunities for Roper Technologies and Global Net
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Roper and Global is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Roper Technologies and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Roper Technologies i.e., Roper Technologies and Global Net go up and down completely randomly.
Pair Corralation between Roper Technologies and Global Net
Assuming the 90 days trading horizon Roper Technologies is expected to generate 0.81 times more return on investment than Global Net. However, Roper Technologies is 1.23 times less risky than Global Net. It trades about 0.19 of its potential returns per unit of risk. Global Net Lease is currently generating about -0.02 per unit of risk. If you would invest 54,042 in Roper Technologies on September 2, 2024 and sell it today you would earn a total of 2,721 from holding Roper Technologies or generate 5.03% 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. Global Net Lease
Performance |
| Timeline |
| Roper Technologies |
| Global Net Lease |
Roper Technologies and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roper Technologies and Global Net
The main advantage of trading using opposite Roper Technologies and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roper Technologies position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.| Roper Technologies vs. Pets at Home | Roper Technologies vs. Universal Display Corp | Roper Technologies vs. Mindflair Plc | Roper Technologies vs. DFS Furniture PLC |
| Global Net vs. Waste Management | Global Net vs. PureTech Health plc | Global Net vs. Roper Technologies | Global Net vs. Coor Service 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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