Correlation Between PARK24 SPONS and RENTOKIL INITIAL

Can any of the company-specific risk be diversified away by investing in both PARK24 SPONS and RENTOKIL INITIAL 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 PARK24 SPONS and RENTOKIL INITIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PARK24 SPONS ADR1 and RENTOKIL INITIAL ADR5, you can compare the effects of market volatilities on PARK24 SPONS and RENTOKIL INITIAL 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 PARK24 SPONS with a short position of RENTOKIL INITIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARK24 SPONS and RENTOKIL INITIAL.

Diversification Opportunities for PARK24 SPONS and RENTOKIL INITIAL

-0.02

Correlation Coefficient

PARK24 SPONS  RENTOKIL INITIAL

Good diversification

The 3 months correlation between PARK24 and RENTOKIL is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding PARK24 SPONS ADR1 and RENTOKIL INITIAL ADR5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RENTOKIL INITIAL ADR5 and PARK24 SPONS 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 PARK24 SPONS ADR1 are associated (or correlated) with RENTOKIL INITIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RENTOKIL INITIAL ADR5 has no effect on the direction of PARK24 SPONS i.e., PARK24 SPONS and RENTOKIL INITIAL go up and down completely randomly.

Pair Corralation between PARK24 SPONS and RENTOKIL INITIAL

Assuming the 90 days horizon PARK24 SPONS ADR1 is expected to under-perform the RENTOKIL INITIAL. In addition to that, PARK24 SPONS is 1.06 times more volatile than RENTOKIL INITIAL ADR5. It trades about -0.06 of its total potential returns per unit of risk. RENTOKIL INITIAL ADR5 is currently generating about 0.01 per unit of volatility. If you would invest  1,960  in RENTOKIL INITIAL ADR5 on April 20, 2025 and sell it today you would earn a total of  10.00  from holding RENTOKIL INITIAL ADR5 or generate 0.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

PARK24 SPONS ADR1  vs.  RENTOKIL INITIAL ADR5

PARK24 SPONS ADR1

Risk-Adjusted Performance

Very Weak

Over the last 90 days PARK24 SPONS ADR1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

RENTOKIL INITIAL ADR5

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in RENTOKIL INITIAL ADR5 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, RENTOKIL INITIAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PARK24 SPONS and RENTOKIL INITIAL

The main advantage of trading using opposite PARK24 SPONS and RENTOKIL INITIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARK24 SPONS position performs unexpectedly, RENTOKIL INITIAL 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 RENTOKIL INITIAL will offset losses from the drop in RENTOKIL INITIAL's long position.

The idea behind PARK24 SPONS ADR1 and RENTOKIL INITIAL ADR5 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.