Correlation Between Rollins and Allegheny Technologies
Can any of the company-specific risk be diversified away by investing in both Rollins and Allegheny 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 Rollins and Allegheny Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rollins and Allegheny Technologies Incorporated, you can compare the effects of market volatilities on Rollins and Allegheny 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 Rollins with a short position of Allegheny Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rollins and Allegheny Technologies.
Diversification Opportunities for Rollins and Allegheny Technologies
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rollins and Allegheny is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Rollins and Allegheny Technologies Incorpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegheny Technologies 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 Allegheny Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegheny Technologies has no effect on the direction of Rollins i.e., Rollins and Allegheny Technologies go up and down completely randomly.
Pair Corralation between Rollins and Allegheny Technologies
Considering the 90-day investment horizon Rollins is expected to generate 0.76 times more return on investment than Allegheny Technologies. However, Rollins is 1.32 times less risky than Allegheny Technologies. It trades about 0.18 of its potential returns per unit of risk. Allegheny Technologies Incorporated is currently generating about 0.06 per unit of risk. If you would invest 5,856 in Rollins on September 10, 2025 and sell it today you would earn a total of 198.00 from holding Rollins or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Rollins vs. Allegheny Technologies Incorpo
Performance |
| Timeline |
| Rollins |
| Allegheny Technologies |
Rollins and Allegheny Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rollins and Allegheny Technologies
The main advantage of trading using opposite Rollins and Allegheny Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rollins position performs unexpectedly, Allegheny 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 Allegheny Technologies will offset losses from the drop in Allegheny Technologies' long position.The idea behind Rollins and Allegheny Technologies Incorporated 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.| Allegheny Technologies vs. Carpenter Technology | Allegheny Technologies vs. Mueller Industries | Allegheny Technologies vs. Graco Inc | Allegheny Technologies vs. Lincoln Electric Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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