Correlation Between Wizz Air and Roper Technologies

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

By analyzing existing cross correlation between Wizz Air Holdings and Roper Technologies, you can compare the effects of market volatilities on Wizz Air and Roper Technologies 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 Wizz Air with a short position of Roper Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Roper Technologies.

Diversification Opportunities for Wizz Air and Roper Technologies

0.66

Correlation Coefficient

Wizz Air  Roper Technologies

Poor diversification

The 3 months correlation between Wizz and Roper is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and Roper Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roper Technologies and Wizz Air 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 Wizz Air Holdings are associated (or correlated) with Roper Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roper Technologies has no effect on the direction of Wizz Air i.e., Wizz Air and Roper Technologies go up and down completely randomly.

Pair Corralation between Wizz Air and Roper Technologies

Assuming the 90 days trading horizon Wizz Air Holdings is expected to generate 3.78 times more return on investment than Roper Technologies. However, Wizz Air is 3.78 times more volatile than Roper Technologies. It trades about 0.06 of its potential returns per unit of risk. Roper Technologies is currently generating about 0.17 per unit of risk. If you would invest  142,200  in Wizz Air Holdings on December 30, 2024 and sell it today you would earn a total of  15,300  from holding Wizz Air Holdings or generate 10.76% return on investment over 90 days.

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

Wizz Air Holdings  vs.  Roper Technologies

Wizz Air Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wizz Air Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Wizz Air unveiled solid returns over the last few months and may actually be approaching a breakup point.

Roper Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Roper Technologies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Roper Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Wizz Air and Roper Technologies

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

The idea behind Wizz Air Holdings and Roper Technologies 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.