Correlation Between Altus Power and Rolls Royce

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Altus Power and Rolls Royce 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 Altus Power and Rolls Royce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altus Power and Rolls Royce Grp, you can compare the effects of market volatilities on Altus Power and Rolls Royce 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 Altus Power with a short position of Rolls Royce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altus Power and Rolls Royce.

Diversification Opportunities for Altus Power and Rolls Royce

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Altus and Rolls is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Altus Power and Rolls Royce Grp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rolls Royce Grp and Altus Power 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 Altus Power are associated (or correlated) with Rolls Royce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rolls Royce Grp has no effect on the direction of Altus Power i.e., Altus Power and Rolls Royce go up and down completely randomly.

Pair Corralation between Altus Power and Rolls Royce

Given the investment horizon of 90 days Altus Power is expected to under-perform the Rolls Royce. In addition to that, Altus Power is 2.11 times more volatile than Rolls Royce Grp. It trades about -0.28 of its total potential returns per unit of risk. Rolls Royce Grp is currently generating about 0.37 per unit of volatility. If you would invest  90.00  in Rolls Royce Grp on August 28, 2022 and sell it today you would earn a total of  19.00  from holding Rolls Royce Grp or generate 21.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Altus Power  vs.  Rolls Royce Grp

 Performance (%) 
       Timeline  
Altus Power 
Altus Performance
0 of 100
Over the last 90 days Altus Power has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Etf's basic indicators remain relatively invariable which may send shares a bit higher in December 2022. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Altus Price Channel

Rolls Royce Grp 
Rolls Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Rolls Royce Grp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Rolls Royce showed solid returns over the last few months and may actually be approaching a breakup point.

Rolls Price Channel

Altus Power and Rolls Royce Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Altus Power and Rolls Royce

The main advantage of trading using opposite Altus Power and Rolls Royce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altus Power position performs unexpectedly, Rolls Royce 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 Rolls Royce will offset losses from the drop in Rolls Royce's long position.
Altus Power vs. Total Stock Market
Altus Power vs. Midcap ETF Vanguard
Altus Power vs. SP 500 SPDR
Altus Power vs. FTSE EM ETF
The idea behind Altus Power and Rolls Royce Grp 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.
Rolls Royce vs. General Dynamics Corp
Rolls Royce vs. Boeing Company
Rolls Royce vs. Lockheed Martin Corp
Rolls Royce vs. Northrop Grumman Corp
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

Other Complementary Tools

Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go