Correlation Between Roper Technologies and Centaur Media

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

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

Diversification Opportunities for Roper Technologies and Centaur Media

-0.04

Correlation Coefficient

Roper Technologies  Centaur Media

Good diversification

The 3 months correlation between Roper and Centaur is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Roper Technologies and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media 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 Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of Roper Technologies i.e., Roper Technologies and Centaur Media go up and down completely randomly.

Pair Corralation between Roper Technologies and Centaur Media

Assuming the 90 days trading horizon Roper Technologies is expected to under-perform the Centaur Media. But the stock apears to be less risky and, when comparing its historical volatility, Roper Technologies is 1.21 times less risky than Centaur Media. The stock trades about -0.3 of its potential returns per unit of risk. The Centaur Media is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,300  in Centaur Media on September 29, 2024 and sell it today you would earn a total of  0.00  from holding Centaur Media or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Roper Technologies  vs.  Centaur Media

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Centaur Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centaur Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Roper Technologies and Centaur Media

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

The idea behind Roper Technologies and Centaur Media 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.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.