Correlation Between Rollins and WW International
Can any of the company-specific risk be diversified away by investing in both Rollins and WW 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 WW International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rollins and WW International, you can compare the effects of market volatilities on Rollins and WW 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 WW International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rollins and WW International.
Diversification Opportunities for Rollins and WW International
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rollins and WW International is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Rollins and WW International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WW 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 WW International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WW International has no effect on the direction of Rollins i.e., Rollins and WW International go up and down completely randomly.
Pair Corralation between Rollins and WW International
Considering the 90-day investment horizon Rollins is expected to generate 2.0 times less return on investment than WW International. But when comparing it to its historical volatility, Rollins is 7.77 times less risky than WW International. It trades about 0.38 of its potential returns per unit of risk. WW International is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 112.00 in WW International on August 28, 2024 and sell it today you would earn a total of 12.00 from holding WW International or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rollins vs. WW International
Performance |
| Timeline |
| Rollins |
| WW International |
Rollins and WW International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rollins and WW International
The main advantage of trading using opposite Rollins and WW International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rollins position performs unexpectedly, WW 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 WW International will offset losses from the drop in WW International's long position.| Rollins vs. Carriage Services | Rollins vs. Frontdoor | Rollins vs. Mister Car Wash | Rollins vs. Bright Horizons Family |
| WW International vs. Bright Horizons Family | WW International vs. Smart Share Global | WW International vs. Mister Car Wash | WW International vs. Rollins |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |