Correlation Between Roper Technologies, and Accenture Plc
Can any of the company-specific risk be diversified away by investing in both Roper Technologies, and Accenture Plc 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 Accenture Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roper Technologies, and Accenture plc, you can compare the effects of market volatilities on Roper Technologies, and Accenture Plc 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 Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roper Technologies, and Accenture Plc.
Diversification Opportunities for Roper Technologies, and Accenture Plc
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Roper and Accenture is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Roper Technologies, and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture 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 Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of Roper Technologies, i.e., Roper Technologies, and Accenture Plc go up and down completely randomly.
Pair Corralation between Roper Technologies, and Accenture Plc
Assuming the 90 days trading horizon Roper Technologies, is expected to generate 1.22 times less return on investment than Accenture Plc. But when comparing it to its historical volatility, Roper Technologies, is 1.21 times less risky than Accenture Plc. It trades about 0.07 of its potential returns per unit of risk. Accenture plc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 163,587 in Accenture plc on October 28, 2024 and sell it today you would earn a total of 49,827 from holding Accenture plc or generate 30.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.68% |
| Values | Daily Returns |
Roper Technologies, vs. Accenture plc
Performance |
| Timeline |
| Roper Technologies, |
| Accenture plc |
Roper Technologies, and Accenture Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roper Technologies, and Accenture Plc
The main advantage of trading using opposite Roper Technologies, and Accenture Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roper Technologies, position performs unexpectedly, Accenture Plc 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 Accenture Plc will offset losses from the drop in Accenture Plc's long position.| Roper Technologies, vs. Honeywell International | Roper Technologies, vs. General Electric | Roper Technologies, vs. Eaton plc | Roper Technologies, vs. Cummins |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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