Correlation Between Rollins and Huntington Ingalls

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

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

Diversification Opportunities for Rollins and Huntington Ingalls

0.59

Correlation Coefficient

Rollins  Huntington Ingalls

Very weak diversification

The 3 months correlation between Rollins and Huntington is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Rollins and Huntington Ingalls Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Ingalls 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 Huntington Ingalls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntington Ingalls has no effect on the direction of Rollins i.e., Rollins and Huntington Ingalls go up and down completely randomly.

Pair Corralation between Rollins and Huntington Ingalls

Considering the 90-day investment horizon Rollins is expected to generate 8.01 times less return on investment than Huntington Ingalls. But when comparing it to its historical volatility, Rollins is 1.14 times less risky than Huntington Ingalls. It trades about 0.02 of its potential returns per unit of risk. Huntington Ingalls Industries is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  27,350  in Huntington Ingalls Industries on September 12, 2025 and sell it today you would earn a total of  4,964  from holding Huntington Ingalls Industries or generate 18.15% return on investment over 90 days.

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

Rollins  vs.  Huntington Ingalls Industries

Rollins

Risk-Adjusted Performance

Weakest

Compared to the overall equity markets, risk-adjusted returns on investments in Rollins are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Rollins is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Huntington Ingalls

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Huntington Ingalls Industries are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly sluggish forward indicators, Huntington Ingalls demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rollins and Huntington Ingalls

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

The idea behind Rollins and Huntington Ingalls Industries 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.