Correlation Between Experian Plc and Rollins

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

By analyzing existing cross correlation between Experian plc and Rollins, you can compare the effects of market volatilities on Experian Plc and Rollins 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 Experian Plc with a short position of Rollins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Experian Plc and Rollins.

Diversification Opportunities for Experian Plc and Rollins

0.11

Correlation Coefficient

Experian Plc  Rollins

Average diversification

The 3 months correlation between Experian and Rollins is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Experian plc and Rollins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rollins and Experian Plc 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 Experian plc are associated (or correlated) with Rollins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rollins has no effect on the direction of Experian Plc i.e., Experian Plc and Rollins go up and down completely randomly.

Pair Corralation between Experian Plc and Rollins

Assuming the 90 days horizon Experian plc is expected to generate 1.07 times more return on investment than Rollins. However, Experian Plc is 1.07 times more volatile than Rollins. It trades about 0.14 of its potential returns per unit of risk. Rollins is currently generating about 0.0 per unit of risk. If you would invest  4,165  in Experian plc on April 24, 2025 and sell it today you would earn a total of  515.00  from holding Experian plc or generate 12.36% return on investment over 90 days.

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

Experian plc  vs.  Rollins

Experian plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Experian plc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Experian Plc may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Rollins

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rollins has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Rollins is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Experian Plc and Rollins

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

The idea behind Experian plc and Rollins 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.