Correlation Between Roper Technologies, and Adobe

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

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

Diversification Opportunities for Roper Technologies, and Adobe

-0.58

Correlation Coefficient

Roper Technologies,  Adobe

Excellent diversification

The 3 months correlation between Roper and Adobe is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Roper Technologies, and Adobe Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Inc 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 Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Inc has no effect on the direction of Roper Technologies, i.e., Roper Technologies, and Adobe go up and down completely randomly.

Pair Corralation between Roper Technologies, and Adobe

Assuming the 90 days trading horizon Roper Technologies, is expected to generate 0.01 times more return on investment than Adobe. However, Roper Technologies, is 188.22 times less risky than Adobe. It trades about 0.13 of its potential returns per unit of risk. Adobe Inc is currently generating about -0.15 per unit of risk. If you would invest  33,267  in Roper Technologies, on December 22, 2024 and sell it today you would earn a total of  33.00  from holding Roper Technologies, or generate 0.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Roper Technologies,  vs.  Adobe Inc

Roper Technologies,

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Roper Technologies, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Roper Technologies, is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Adobe Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adobe Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Roper Technologies, and Adobe

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

The idea behind Roper Technologies, and Adobe Inc 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.