Correlation Between Rollins and American International
Can any of the company-specific risk be diversified away by investing in both Rollins and American International 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 Rollins and American International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rollins and American International Holdings, you can compare the effects of market volatilities on Rollins and American International 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 Rollins with a short position of American International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rollins and American International.
Diversification Opportunities for Rollins and American International
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Rollins and American is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Rollins and American International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American International and Rollins 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 Rollins are associated (or correlated) with American International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American International has no effect on the direction of Rollins i.e., Rollins and American International go up and down completely randomly.
Pair Corralation between Rollins and American International
Considering the 90-day investment horizon Rollins is expected to generate 123.64 times less return on investment than American International. But when comparing it to its historical volatility, Rollins is 188.15 times less risky than American International. It trades about 0.29 of its potential returns per unit of risk. American International Holdings is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 0.01 in American International Holdings on September 1, 2024 and sell it today you would earn a total of 0.00 from holding American International Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Rollins vs. American International Holding
Performance |
| Timeline |
| Rollins |
| American International |
Rollins and American International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rollins and American International
The main advantage of trading using opposite Rollins and American International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rollins position performs unexpectedly, American International 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 American International will offset losses from the drop in American International's long position.| Rollins vs. Carriage Services | Rollins vs. Frontdoor | Rollins vs. Mister Car Wash | Rollins vs. Bright Horizons Family |
| American International vs. Goodfood Market Corp | American International vs. GD Entertainment Technology | American International vs. Mister Car Wash | American International vs. Bright Horizons Family |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |