Correlation Between Rollins and Nuvve Holding

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

By analyzing existing cross correlation between Rollins and Nuvve Holding Corp, you can compare the effects of market volatilities on Rollins and Nuvve Holding 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 Nuvve Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rollins and Nuvve Holding.

Diversification Opportunities for Rollins and Nuvve Holding

0.46

Correlation Coefficient

Rollins  Nuvve Holding

Very weak diversification

The 3 months correlation between Rollins and Nuvve is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Rollins and Nuvve Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvve Holding Corp 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 Nuvve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvve Holding Corp has no effect on the direction of Rollins i.e., Rollins and Nuvve Holding go up and down completely randomly.

Pair Corralation between Rollins and Nuvve Holding

Considering the 90-day investment horizon Rollins is expected to under-perform the Nuvve Holding. But the stock apears to be less risky and, when comparing its historical volatility, Rollins is 10.75 times less risky than Nuvve Holding. The stock trades about -0.09 of its potential returns per unit of risk. The Nuvve Holding Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2.45  in Nuvve Holding Corp on September 29, 2024 and sell it today you would lose (1.07) from holding Nuvve Holding Corp or give up 43.67% of portfolio value over 90 days.

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

Rollins  vs.  Nuvve Holding Corp

Rollins

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rollins has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Nuvve Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuvve Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Nuvve Holding is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Rollins and Nuvve Holding

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

The idea behind Rollins and Nuvve Holding Corp 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.