Correlation Between Intuit and Roper Technologies

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

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

Diversification Opportunities for Intuit and Roper Technologies

0.5

Correlation Coefficient

Intuit  Roper Technologies

Very weak diversification

The 3 months correlation between Intuit and Roper is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Intuit Inc and Roper Technologies Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roper Technologies Common and Intuit 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 Intuit Inc 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 Common has no effect on the direction of Intuit i.e., Intuit and Roper Technologies go up and down completely randomly.

Pair Corralation between Intuit and Roper Technologies

Given the investment horizon of 90 days Intuit Inc is expected to under-perform the Roper Technologies. In addition to that, Intuit is 1.92 times more volatile than Roper Technologies Common. It trades about -0.06 of its total potential returns per unit of risk. Roper Technologies Common is currently generating about 0.0 per unit of volatility. If you would invest  54,270  in Roper Technologies Common on February 28, 2024 and sell it today you would lose (303.00) from holding Roper Technologies Common or give up 0.56% of portfolio value over 90 days.

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

Intuit Inc  vs.  Roper Technologies Common

Intuit Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intuit Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Roper Technologies Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roper Technologies Common has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Roper Technologies is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Intuit and Roper Technologies

The main advantage of trading using opposite Intuit and Roper Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuit 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 Intuit Inc and Roper Technologies Common 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.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.