Correlation Between All American and Rentokil Initial
Can any of the company-specific risk be diversified away by investing in both All American and Rentokil Initial 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 All American and Rentokil Initial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between All American Pet and Rentokil Initial plc, you can compare the effects of market volatilities on All American and Rentokil Initial 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 All American with a short position of Rentokil Initial. Check out your portfolio center. Please also check ongoing floating volatility patterns of All American and Rentokil Initial.
Diversification Opportunities for All American and Rentokil Initial
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between All and Rentokil is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding All American Pet and Rentokil Initial plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rentokil Initial plc and All American 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 All American Pet are associated (or correlated) with Rentokil Initial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rentokil Initial plc has no effect on the direction of All American i.e., All American and Rentokil Initial go up and down completely randomly.
Pair Corralation between All American and Rentokil Initial
Given the investment horizon of 90 days All American Pet is expected to under-perform the Rentokil Initial. In addition to that, All American is 7.01 times more volatile than Rentokil Initial plc. It trades about -0.24 of its total potential returns per unit of risk. Rentokil Initial plc is currently generating about -0.1 per unit of volatility. If you would invest 495.00 in Rentokil Initial plc on October 25, 2024 and sell it today you would lose (36.00) from holding Rentokil Initial plc or give up 7.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
All American Pet vs. Rentokil Initial plc
Performance |
| Timeline |
| All American Pet |
| Rentokil Initial plc |
All American and Rentokil Initial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with All American and Rentokil Initial
The main advantage of trading using opposite All American and Rentokil Initial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if All American position performs unexpectedly, Rentokil Initial 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 Rentokil Initial will offset losses from the drop in Rentokil Initial's long position.| All American vs. International Consolidated Companies | All American vs. Frontera Group | All American vs. XCPCNL Business Services | All American vs. Aramark Holdings |
| Rentokil Initial vs. Maximus | Rentokil Initial vs. CBIZ Inc | Rentokil Initial vs. First Advantage Corp | Rentokil Initial vs. Network 1 Technologies |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |