Correlation Between Roper Technologies and Dairy Farm

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

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

Diversification Opportunities for Roper Technologies and Dairy Farm

0.0

Correlation Coefficient

Roper Technologies  Dairy Farm

Pay attention - limited upside

The 3 months correlation between Roper and Dairy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Roper Technologies and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International 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 Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of Roper Technologies i.e., Roper Technologies and Dairy Farm go up and down completely randomly.

Pair Corralation between Roper Technologies and Dairy Farm

If you would invest  52,464  in Roper Technologies on December 22, 2024 and sell it today you would earn a total of  4,491  from holding Roper Technologies or generate 8.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Roper Technologies  vs.  Dairy Farm International

Roper Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Roper Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Roper Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Dairy Farm International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dairy Farm International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Dairy Farm 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 Dairy Farm

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

The idea behind Roper Technologies and Dairy Farm International 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.