Correlation Between Verisk Analytics and Rollins

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

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

Diversification Opportunities for Verisk Analytics and Rollins

0.72

Correlation Coefficient

Verisk Analytics  Rollins

Poor diversification

The 3 months correlation between Verisk and Rollins is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Verisk Analytics and Rollins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rollins and Verisk Analytics 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 Verisk Analytics 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 Verisk Analytics i.e., Verisk Analytics and Rollins go up and down completely randomly.

Pair Corralation between Verisk Analytics and Rollins

Assuming the 90 days trading horizon Verisk Analytics is expected to generate 1.28 times more return on investment than Rollins. However, Verisk Analytics is 1.28 times more volatile than Rollins. It trades about 0.07 of its potential returns per unit of risk. Rollins is currently generating about 0.0 per unit of risk. If you would invest  24,464  in Verisk Analytics on April 22, 2025 and sell it today you would earn a total of  1,486  from holding Verisk Analytics or generate 6.07% return on investment over 90 days.

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

Verisk Analytics  vs.  Rollins

Verisk Analytics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Verisk Analytics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Verisk Analytics 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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Verisk Analytics and Rollins

The main advantage of trading using opposite Verisk Analytics and Rollins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verisk Analytics 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 Verisk Analytics 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.