Correlation Between Roper Technologies and Greatland Gold
Can any of the company-specific risk be diversified away by investing in both Roper Technologies and Greatland Gold 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 Greatland Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roper Technologies and Greatland Gold plc, you can compare the effects of market volatilities on Roper Technologies and Greatland Gold 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 Greatland Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roper Technologies and Greatland Gold.
Diversification Opportunities for Roper Technologies and Greatland Gold
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Roper and Greatland is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Roper Technologies and Greatland Gold plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatland Gold plc 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 Greatland Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatland Gold plc has no effect on the direction of Roper Technologies i.e., Roper Technologies and Greatland Gold go up and down completely randomly.
Pair Corralation between Roper Technologies and Greatland Gold
Assuming the 90 days trading horizon Roper Technologies is expected to generate 40.28 times less return on investment than Greatland Gold. But when comparing it to its historical volatility, Roper Technologies is 3.56 times less risky than Greatland Gold. It trades about 0.01 of its potential returns per unit of risk. Greatland Gold plc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 518.00 in Greatland Gold plc on September 12, 2024 and sell it today you would earn a total of 247.00 from holding Greatland Gold plc or generate 47.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roper Technologies vs. Greatland Gold plc
Performance |
| Timeline |
| Roper Technologies |
| Greatland Gold plc |
Roper Technologies and Greatland Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roper Technologies and Greatland Gold
The main advantage of trading using opposite Roper Technologies and Greatland Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roper Technologies position performs unexpectedly, Greatland Gold 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 Greatland Gold will offset losses from the drop in Greatland Gold's long position.| Roper Technologies vs. Medical Properties Trust | Roper Technologies vs. Spirent Communications plc | Roper Technologies vs. Amedeo Air Four | Roper Technologies vs. Wizz Air Holdings |
| Greatland Gold vs. Odyssean Investment Trust | Greatland Gold vs. New Residential Investment | Greatland Gold vs. Wheaton Precious Metals | Greatland Gold vs. Herald Investment Trust |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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