Correlation Between First Advantage and Roper Technologies
Can any of the company-specific risk be diversified away by investing in both First Advantage 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 First Advantage and Roper Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Advantage Corp and Roper Technologies, you can compare the effects of market volatilities on First Advantage 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 First Advantage with a short position of Roper Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and Roper Technologies.
Diversification Opportunities for First Advantage and Roper Technologies
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Roper is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and Roper Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roper Technologies and First Advantage 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 First Advantage Corp 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 First Advantage i.e., First Advantage and Roper Technologies go up and down completely randomly.
Pair Corralation between First Advantage and Roper Technologies
Allowing for the 90-day total investment horizon First Advantage Corp is expected to generate 1.62 times more return on investment than Roper Technologies. However, First Advantage is 1.62 times more volatile than Roper Technologies. It trades about -0.12 of its potential returns per unit of risk. Roper Technologies is currently generating about -0.25 per unit of risk. If you would invest 1,250 in First Advantage Corp on November 17, 2025 and sell it today you would lose (301.00) from holding First Advantage Corp or give up 24.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Advantage Corp vs. Roper Technologies
Performance |
| Timeline |
| First Advantage Corp |
| Roper Technologies |
First Advantage and Roper Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Advantage and Roper Technologies
The main advantage of trading using opposite First Advantage and Roper Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Advantage 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.| First Advantage vs. Rockwell Automation | First Advantage vs. Delta Air Lines | First Advantage vs. WW Grainger | First Advantage 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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