Correlation Between Automatic Data and Roper Technologies
Can any of the company-specific risk be diversified away by investing in both Automatic Data and Roper Technologies 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 Automatic Data and Roper Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automatic Data Processing and Roper Technologies, you can compare the effects of market volatilities on Automatic Data and Roper Technologies 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 Automatic Data with a short position of Roper Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and Roper Technologies.
Diversification Opportunities for Automatic Data and Roper Technologies
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Automatic and Roper is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and Roper Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roper Technologies and Automatic Data 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 Automatic Data Processing are associated (or correlated) with Roper Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roper Technologies has no effect on the direction of Automatic Data i.e., Automatic Data and Roper Technologies go up and down completely randomly.
Pair Corralation between Automatic Data and Roper Technologies
Considering the 90-day investment horizon Automatic Data Processing is expected to generate 0.67 times more return on investment than Roper Technologies. However, Automatic Data Processing is 1.5 times less risky than Roper Technologies. It trades about -0.16 of its potential returns per unit of risk. Roper Technologies is currently generating about -0.21 per unit of risk. If you would invest 24,849 in Automatic Data Processing on November 22, 2025 and sell it today you would lose (3,252) from holding Automatic Data Processing or give up 13.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automatic Data Processing vs. Roper Technologies
Performance |
| Timeline |
| Automatic Data Processing |
| Roper Technologies |
Automatic Data and Roper Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and Roper Technologies
The main advantage of trading using opposite Automatic Data and Roper Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data position performs unexpectedly, Roper Technologies 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 Roper Technologies will offset losses from the drop in Roper Technologies' long position.| Automatic Data vs. Rockwell Automation | Automatic Data vs. Delta Air Lines | Automatic Data vs. WW Grainger | Automatic Data vs. Ametek Inc |
| Roper Technologies vs. Ametek Inc | Roper Technologies vs. Rockwell Automation | Roper Technologies vs. Ferguson Plc | Roper Technologies vs. WW Grainger |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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