Correlation Between Roper Technologies and Chocoladefabriken

Can any of the company-specific risk be diversified away by investing in both Roper Technologies and Chocoladefabriken 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 Chocoladefabriken into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Roper Technologies and Chocoladefabriken Lindt Spruengli, you can compare the effects of market volatilities on Roper Technologies and Chocoladefabriken 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 Chocoladefabriken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roper Technologies and Chocoladefabriken.

Diversification Opportunities for Roper Technologies and Chocoladefabriken

0.14

Correlation Coefficient

Roper Technologies  Chocoladefabriken

Average diversification

The 3 months correlation between Roper and Chocoladefabriken is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Roper Technologies and Chocoladefabriken Lindt Spruen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt 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 Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of Roper Technologies i.e., Roper Technologies and Chocoladefabriken go up and down completely randomly.

Pair Corralation between Roper Technologies and Chocoladefabriken

Assuming the 90 days trading horizon Roper Technologies is expected to generate 1.41 times more return on investment than Chocoladefabriken. However, Roper Technologies is 1.41 times more volatile than Chocoladefabriken Lindt Spruengli. It trades about -0.05 of its potential returns per unit of risk. Chocoladefabriken Lindt Spruengli is currently generating about -0.12 per unit of risk. If you would invest  53,928  in Roper Technologies on October 8, 2024 and sell it today you would lose (2,319) from holding Roper Technologies or give up 4.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Roper Technologies  vs.  Chocoladefabriken Lindt Spruen

Roper Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roper Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Roper Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Chocoladefabriken Lindt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chocoladefabriken Lindt Spruengli has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Chocoladefabriken is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Roper Technologies and Chocoladefabriken

The main advantage of trading using opposite Roper Technologies and Chocoladefabriken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roper Technologies position performs unexpectedly, Chocoladefabriken 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 Chocoladefabriken will offset losses from the drop in Chocoladefabriken's long position.

The idea behind Roper Technologies and Chocoladefabriken Lindt Spruengli pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.