Correlation Between Rollins and Equifax

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

By analyzing existing cross correlation between Rollins and Equifax, you can compare the effects of market volatilities on Rollins and Equifax 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 Equifax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rollins and Equifax.

Diversification Opportunities for Rollins and Equifax

0.5

Correlation Coefficient

Rollins  Equifax

Very weak diversification

The 3 months correlation between Rollins and Equifax is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Rollins and Equifax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equifax 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 Equifax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equifax has no effect on the direction of Rollins i.e., Rollins and Equifax go up and down completely randomly.

Pair Corralation between Rollins and Equifax

Assuming the 90 days horizon Rollins is expected to generate 63.57 times less return on investment than Equifax. But when comparing it to its historical volatility, Rollins is 2.23 times less risky than Equifax. It trades about 0.0 of its potential returns per unit of risk. Equifax is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  18,664  in Equifax on April 22, 2025 and sell it today you would earn a total of  3,936  from holding Equifax or generate 21.09% return on investment over 90 days.

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

Rollins  vs.  Equifax

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Equifax

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Equifax are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Equifax reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rollins and Equifax

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

The idea behind Rollins and Equifax 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.